Market On Open - Wednesday 20 December 2023

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Sometimes The Best Thing To Do Is Nothing

As the denouement to 2023 continues in its bonus-enhancing manner, new highs and double, triple tops are being made left, right and center. One of two things happens next. Either equities bust up and through those tops and onto some kind of moon orbit, or, the tops prove resistance and we see a meaningful selloff (within, in my opinion, a still-bullish longer term direction). Hard to guess which and again in my opinion, there is no point trying to guess. Russell 2000 futures made a triple top earlier today - does that mean they dump tomorrow? No clue. Personally I have plenty of long Russell exposure and a very modest short Russell exposure. That will need rebalancing when the Russell does start to cool off. But if and when it does start to cool off, there will be plenty of time to add those shorts on the way down. Unless the selloff isn't so big in which case there won't be much time to add shorts .... but also no need to add many shorts. Like that.

So for now my own devastatingly insightful strategy is, do nothing. Continue to accumulate unrealized gains on the long side and be ready to hedge these unrealized gains if and when the Dementors get to work on equities.

If you have a moment, be sure to watch our latest video, which explains our method in a little more detail. You can find it here:

Without further ado - let's get to work!

Note - to open full-page versions of these charts, just click on the chart headings, which are hyperlinks.

US 10-Year Yield

S&P500 / SPY / ES / UPRO