The market took a quick turn to the downside. The Dow Jones
30 is down 4.2% for the year in the first month. The S&P is down. The fear
index VIX rose sharply. Bond funds are up modestly and even gold is perking up
as a defense against the markets dropping.
During the last two days we have seen a sea of red. What
will I do?
I will beat a fast retreat and listen to what the markets
are saying. See below.
DIA (Dow Jones 30 ETF) has a down signal. See chart.
SPY (S&P 500 ETF) has a down signal on both systems that
I use on it.
VEU (All world index, ex-USA) has a down signal.
EEM (Emerging Markets ETF) has had a down signal from
1/2/14.
Rahul,
ReplyDeleteYou mention in your blogs that when you are long equities, you also have put options in place. What does the "put insurance" cost you each year in terms of percentage?
Maybe in an upcoming blog you could explain the actual process that you use to hedge your portfolio. Questions I have are how many options are required to fully hedge a portfolio? Do you buy in the money or out of the money options? Is there any time that you do not have put options when you are long the market?