Market On Open - Wednesday 28 February

Getting Boring Now

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Up Until Further Notice

by Alex King

Still only-up. The major indices yesterday pretended to be down then raced up into the close; the Russell was strong all day. Until that trend is broken, it will continue.

Hedging Update

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Personally I have one remaining underwater short, which is SPXU. It’s down about 8.5%, so, nothing too painful. This dates from a few weeks back when I hedged all index positions in order to be able to step back from the screen whilst busy. The SQQQ I added at that time I was able to sell for a small gain when Nasdaq sold off prior to Nvidia earnings; SOXS never returned to profit but an overhedge long with SOXL and UDOW meant that I could sell all three together for a net zero ie. cancelling out the loss in SOXS. Right now I am using TNA to overhedge SPXU (SPXU is already hedged with UPRO). So, if the market continues to move up I expect to have gains in TNA and losses in SPXU, such that I can sell both together to neutralize the SPXU losses; if the market moves down then I can either sell SPXU at a small gain or a smaller loss, either of which would be fine. Hedging is I find a superb way to trade the 3x index ETFs without fear or euphoria. My constant concern is trapped shorts in this bull market; this is what requires the most careful management in my view.

Charts

Paying members of Inner Circle, scroll down for our long- and short-term take on the S&P500, the Nasdaq-100, the Dow Jones 30 and the Russell 2000 - including the regular ETFs, the futures, the 3x leveraged ETFs and then finishing with a take on sector ETFs in semiconductor, tech, and the Fangs.

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