We tightened our hedges in our Long / Short hedged portfolio today. Some of our longs were getting away from their hedge so we brought them closer together. As I’ve noted on Twitter @DownsideHedge, our core market health indicators are strengthening this week, but our market risk indicator refuses to come in line. That leaves us aggressively hedged even though we’re seeing underlying health in the market. A further rally (and resolution of the budget negotiations in Washington) will most likely improve both our core health indicators and our market risk indicator. As a result, good news that is accompanied by a rally will most likely move us from aggressively hedged to a large long exposure all at the same time. Nevertheless, we’ll continue to follow our discipline and wait for a signal before making any portfolio adjustments.