Market On Open - Wednesday 28 February

Getting Boring Now

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.

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

Note, from next week these Hedging Update sections will go below the paywall. If youre a free reader here and you want to receive this commentary, be sure to join as a paying member soon!

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.


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.

(Not a paying member? Sign up right here. If you’re not sure about committing, just take the monthly. If you like it and want to take an annual, we’ll deduct that first month’s fee so you’re not out of pocket. If you hate it, you’re down only $299).

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