JANUARY 6th: PORTFOLIO ALLOCATION
I got a question recently asking how the portfolio was allocated between my positions and why I haven't added to my equity related shorts since initiating the positions on December 23rd?
My largest position is currently SCO (short crude oil) making up roughly 22% of the portfolio. TZA and FAZ are around 12% each. That brings my total invested position to just under 50%.
While I am bearish on equities, I have to be cautious about taking my current short ETF exposure to the next level. I plan on doubling exposure in both TZA and FAZ. As well as adding in some ERY and BGZ to round things out once all the puzzle pieces fall into place. Being that short requires timing. Being that aggressively short requires precise timing. I can't afford and won't tolerate a 4% surge once I move all my chips to the middle of the table.
What am I waiting for? I need a couple more pieces of the sentiment puzzle (namely with the put/call ratios) to fall into place. This should occur within the next couple weeks either via the market moving in an extended sideways range into the latter half of January OR the market may decide to shift the rally into overdrive, causing mental trepidation and anxiety amongst both short-sellers and the underallocated bulls.
Either way, I think this scenario takes place within the next couple of weeks.
My current inverse ETF equity exposure is at roughly 25% of the portfolio. By the time all is said an done I would like to have it up to 75%. My only job now is to make sure I'm not swinging for the fences before there is a fence to swing for.
