A time to do nothing
The markets are choppy, what's my ideal strategy?
I closed my short position on the S&P 500 for a small 2.9% gain. This trade was something of a layup, given the strength of the rally and heavy resistance at the 200 day moving average. I don’t think I’ll try it again anytime soon. I have no edge in equities and SH, the inverse ETF, is an uncomfortable product to own.
I increased my oil exposure a further 2% by buying EPD at $26.89. It’s another oil stock recommended by David Hay. A midstream oil and gas producer paying a 7% dividend. My total exposure to oil and gas is now about 8%.
What’s next?
The first thing I though this morning is that I have no strategy and no clue what to do next. That’s fair. I have so much to learn it’s unquantifiable. However, after breaking down my situation I realized that I’m not actually totally lost…
I’m not so much lost, but rather; there’s nothing to do right now! This is a time to let the markets turn, to let the trade come to me.
I expect a (brutal) equities sell-off in September, but it hasn’t arrived yet
I expect to buy more TLT below $110, but we’re not there yet
I expect to start buying ETH at $1,200, but we’re not there yet
I might take a small position in gold miners, but prices are not attractive yet
In short, now is a time to close the charts and open a book (what I’m reading right now). Choppy markets, no clear trend, no matter what I do at this point I’m likely to lose money. So I wait.