Nosebleed Territory

I believe the market has gone too far, too fast as the S&P 500 has climbed nearly 100 points from its lows two short weeks back. Some stocks that I wrote covered calls on have surpassed or are approaching their strikes. This automatically reduces my net long exposure. If this were not the case I would be reducing my net long exposure. I expect sideways movement for the rest of the week at best. I would not be surprised to see us go down a couple of percent. Have a good night.

2 comments:

Brent Barber said...

Seems like moves move longer with less corrections since the 2009 lows.  All 3 times we had major lows, the market went pretty much straight up for long periods.  I blame the fact there are too many hedge funds playing the same game and HFT.  Plus, this time, many hedge funds are behind the indexes according to the benchmarks.  Assuming we have put in a major low, we could be in for another non-stop move upwards.

Tsachy Mishal said...

I used to aggressively trade these short term overbought readings. I no longer do for the reason you cited.