Tactical Update: Long Story Shorter (PREMIUM-UNLOCKED)

*The following Premium Post was issued to TLS members on the morning of March 1, 2021.*

Updated risk-management moves to begin the week.

As mentioned in today’s WMMR, our intermediate-term Risk Model has turned Bearish. However, as we stated in the report, while that is an important development, it is not an all-out sell signal. As we wrote, “First off, this change doesn’t mean wholesale defensive action is necessarily warranted. Indeed, as we have been saying, this development is likely due in large part to the extended nature of many of the Model indicators – and the length of time being in such a condition. Thus, this development was inevitable, eventually. However, given the broader structure of the market, the signal is not likely to be a long-lasting one or likely to produce extensive damage. It does not mean that further upside is precluded for this bull market as the technical and internal structure built up over the past several months has put the market on a solid foundation. With that being said, the Bearish turn in the Model does command our attention and does warrant some immediate protective measures.”

Thus, we are taking advantage of this morning’s substantially strong open to take some of those protective measures, i.e., taking some risk off via both selling and hedging. Specifically:

  • We trimmed positions in XBI, LIT, XLK, XLF and TBT. And we sold out of our position in XLY.
  • We added a hedge in the Nasdaq 100 via buying the inverse QQQ fund, QID, near ~26.80. We also added to our inverse gold miners hedge, JDST, near ~11.90.

We are now down to an approximate ~50% net-long position in equities and about ~60% overall including bonds, commodities & cryptos.

As always, stay tuned to our DSS posts for further developments — they provide the most current updates to our investment portfolio and outlook. We touched on many of these potential moves in today’s DSS.


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.