Facebook Twitter Gplus YouTube E-mail RSS
magnify
Home Featured Market Risk Warning
formats

Market Risk Warning

As I noted yesterday, my Market Risk Indicator is issuing a warning. As a result, the portfolio allocations change as follows.

Long / Short portfolio: 50% long high beta stocks and 50% hedged with mid term volatility (VXZ)

Long / Cash portfolio: 100% cash

Volatility Hedged portfolio: 50% long and 50% hedged with mid term volatility (VXZ)

As I mentioned last week, the bullish percent index is below 60% which significantly increases the risk of another 10% decline from the current level.

161104BPSPX

My core measures of market health had the economy improving and moving above zero this week, while the core measures of risk fell below zero.

161104MarketHealth

Conclusion

We have a market risk warning in place. It’s time to aggressively hedge until the current storm passes.

 
 Share on Facebook Share on Twitter Share on Reddit Share on LinkedIn
No Comments  comments 
Add Comment Register

Leave a Reply

Your email address will not be published. Required fields are marked *

HTML tags are not allowed.