The decision was made last Tuesday after the close to cover our short positions on the following day's open right as the SPX was breaking 4000.
Now that we are 125 points higher, with numerous confirmations taking place that something bullish is certainly afoot, creeping into a little bit of long exposure is warranted.
50% long to start in some rather unconventional positions.
No leveraged index ETFs.
No large cap growth names.
In fact, the greatest opportunity over the next few weeks may just be to front run the increasing number of FOMO cadets that will be looking to make up for lost performance by moving into high-beta, small cap names that still have some surprisingly attractive risk/reward setups, even after the recent growth rally.
Additionally, the more investors lever their exposure to lower interest rates, the more potential for portfolio upside exists.
There is an argument to be made that sometime during mid-March the Fed started a covert YCC (yield curve control) campaign. The entire complexion of bond yields changed in recent weeks, with today being a prime example, as crude oil soared and bonds didn't blink an eye.
Bond market volatility has also cratered from historic heights to a more standard elevation, calming not just the bond market, but obviously the equity markets, as well.
Selectively long.
Levered to persistently lower rates.
Conservatively positioned until we see how the S&P handles 4300.
Simple.
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