Market Thoughts June 10
Indices below 21-day EMA: Red flags mounting. Ensure to read.
I hope you are all well.
On Monday, the 8th of June, in my Market Thoughts update (link is below), I wrote that we had a low-volume bounce after Friday’s high-volume sell-off and mentioned that usually the first bounce can’t be trusted. Further, “the market is starting to look heavy here” and so “this is a time for risk management rather than aggression.” Yesterday, on the 9th of June, the QQQs were also down >5% at one point.
My suggestions were: “No need for drastic measures, but I do feel this is a time for risk management rather than aggression.
Review your active trading positions, tighten stops on partial or full allocations, and consider protecting new capital until a clearer directional setup emerges.
If looking to hedge then one simple strategy (besides holding cash) is to purchase longer-term put options when the S&P 500 falls below a key moving average, such as its 21-day EMA. I personally am not hedging right now, except holding some cash.
Of course, if you are long-term investing, then there is nothing to change, except to ensure you are happy with your overall exposure”
I am seeing more red flags now, and as such my market thoughts plus thoughts on how to proceed are as below:
