This market doesn't waste a minute telling an investor when they are wrong. It's up to the investor whether they want to listen or not. I'm currently in a listening only mode so I'm open to all suggestions the market puts forward.
As a result, I had to quickly evacuate a small long position in gold I put on just as quickly as I took the position. The reason? Market is telling investors it is in love with the idea of risk, whereas gold is a risk off asset. I'm listening.
I also had to cover our QQQ short that was put out last week in a quick tail between my leg move, allowing our long positions room to breathe. The market very simply is expressing the fact that it's too early for a defensive posture of any sort. Once again, I'm listening.
In the meantime, we took a position in SNAP that was immediately rewarded with a gain of 6% from the point of entry for the day until the close of trading.
Generally speaking, it seems that the market did a very good job of convincing nearly everyone that a bear market/recession was on the horizon. As a result, investors have been slow in coming back to the market. Now we have a market that is in runaway freight train mode, making the decision to gain long exposure as uncomfortable as possible for investors. The fact that taking long exposure here for most investors is such an uncomfortable proposition bodes well for a continuation of this rally.
A broad mix of defensive names (insurance, pharma) mixed with aggressive technology exposure is a reasonable position to take and one that has been rewarding as we approach the final trading days of January. I may sporadically take shots on the short side in the weeks ahead in select financial and retail names, depending on how this cookie crumbles as we progress.
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