Not Good...

Yesterday's action in the market was not very encouraging. Do not kid yourself into thinking that, just because the market was up, we have seen the worst. I think there is another shoe to drop here. I can't imagine that we have the sell off like we saw at the beginning of October, but I think there is another leg down based on yesterday's action. I mentioned we were at a crossroads. We took the path of a Bear market.

So what does all that mean. You know that the bias is significantly to the downside for the foreseeable future. Remember, a trend is a trend until it isn't. Near the middle of October, we started a short term trend higher. That is when I bought the index ETF calls.

We are now in a trend lower. That is not to say that we won't have some dramatic up days coming. We might have one today. Bear markets do that. But the short term (and of course the longer term trend) is lower.

That said, how am I positioning myself. I upped my ratio of Calls to Puts to 1:1. A savvy investor asks the next question. What did you purchase/sell to get to that ratio? I bought more puts to even out the ratio. I am hanging on to the calls because we are due for an up day soon. When I get one of those, I will take off a portion of the call position. I have long term calls and I know I can get a better price than they are trading for now. Investing is not about the money you make, it's about the money you don't lose. I am sticking to that philosophy. Tomorrow, I will show you another, longer term trend I am looking at. Until then, stay low risk.