Tactical Update: Short Story, Long II (PREMIUM-UNLOCKED)
*The following Premium Post was issued to TLS members mid-day on October 30, 2020.*
An update to yesterday’s tactical maneuvers.
Once again, just a quick update to yesterday’s post. Our game-plan has not changed, i.e., as stated yesterday:
“…we are gearing up for a potential solid intermediate-term advance following this (likely election-induced) volatility. Posts in recent days have laid out our portfolio maneuvers in anticipation of that. However, in the short-term, we do expect further likely testing/volatility, especially with the weekend and election and earnings imminent. Therefore, as mentioned in this AM’s DSS, we are open to trading around some hedges further, i.e., adding into bounces and covering into tests lower
…just to let you know, we are adding a hedge (short) in the S&P 500 near the ~3340 level here (and may add further near ~3370 and ~3400 should we see those levels). We’ll look to cover some of that towards ~3300 and, of course, more if we test ~3260. Again, this is toward managing near-term fluctuations and doesn’t change our overall outlook.”
As a quick update to yesterday’s post — after shorting the S&P 500 ~3340, we covered (sold) half of the position on the close yesterday (~3310). Today, as was our game-plan, we covered the rest of the hedge when the S&P 500 tested ~3260. Depending on market action, we may re-short the S&P 500 if it bounces strongly — or potentially the Dow if it decisively breaks below 26,200.
At this point, after dropping to ~55% net-long from ~75% net-long prior to the hedge, we are back to ~75%. Actually, we are now about ~80% net-long after finally adding the Mid-Cap Pure Growth Fund (RFG) today as it tested its breakout level ~170. FYI, this net position reflects our equity position only and does not include our precious metals longs or our bond short.
As always, stay tuned to our DSS posts for further developments — they provide the most current updates to our investment portfolio and outlook.
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Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.