Undecided market…
Seems like the market is still undecided. This fight between the bulls and the bears has been going on for the last few trading sessions and there’s still no clear winner in sight.
In market situations like this we’ll avoid or be extremely careful about initiating new positions. In fact, we can’t find a nice trade to initiate! As of now, the DOW is up another 100 points. At the same time VIX (volatility index) is rising, but not by much.
We would like to see a top forming before initiating new positions in SPY and DIA. It’s too late now to chase after the price as a sharp and hard pullback may develop soon. On the other hand, it may not to wise to short an obviously bullish market. Remember, we are market-neutral. We don’t care if it’s a bull or bear market. We simply need good risk/reward trades. At this time, we don’t find any sensible trades. Not yet. Let’s wait and see how this fight turns out. Plus, there’s a FOMC meeting coming up on Wed. We may see a clear winner after that.
To your trading success,
Gary
Founder, Head Trader of MarketNeutralOptions
