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Market Risk Indicator is Signaling

Just a quick note today. Our market risk indicator is currently signaling. We require a weekly close for an official signal so a strong rally tomorrow could negate it.  If it is still signaling tomorrow before the close of the market we’ll be changing our portfolio allocations in the portfolios that use our risk indicator.

Our core long cash portfolio will stay 80% long and 20% cash.  It follows market internals and our core market health indicators.  As a result, it doesn’t react to increasing odds of market risk.

Our long cash portfolio that recognizes market risk will go 100% to cash.  Here’s a link with some information about both of our long / cash portfolios.

Our hedged portfolio (long/short) will be aggressively hedged using put options or a volatility ETF (like XVZ).

Please remember we won’t make any changes unless we’ve still got a signal at the close tomorrow.  We’ll post an update here and on Twitter @DownsideHedge before the market closes if we make any changes to the portfolios.

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