Trades Update

If you follow the market commentary in our companion blog then you know we have suggested not entering fresh long trades and been urging nailing down profits in stocks given increased distribution on the indices.

Today’s market action is hideous and confirms that a correction is underway. That means you should exit all long positions except for perhaps very big winners that continue to hold up. Just bear in mind that should we be in for a significant correction even stocks with outsized gains in robust uptrends will come under pressure at some point.

The only long trade we would consider at present is in gold, which we posted as a watch last week. Gold is a commodity as opposed to an equity and could very well trade higher even in a market correction. We are somewhat doubtful that it will given that gold and the US Dollar tend to trade in opposite directions and during a correction we would expect the dollar to rally on a “flight to safety” trade.

Depending upon the caliber of the correction we might have swing short suggestions on this page in the coming days. And of course we will regularly post market commentary on our companion blog.