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Part of game, what we want to hedge
It's been two weeks since I published a buy thesis for the NYSEARCA:SPY, and in fact all instruments replicating the S&P 500 index (in my case SPX, SPY, ES and
SPY: One Extreme To Another (Technical Analysis)
Summary
- I issue a HOLD rating to longer-term holders, and a SELL rating to short-term traders due to current overvalued levels and asymmetric February risks.
- The S&P 500 index is up almost 5% in 14 days, which is off the average, and statistically we have a risk of reversion to the mean here.
- Historical February performance indicates a higher probability of a downtrend, with market volatility heightened by major company earnings reports.
- I am gradually closing out long SPY positions and moving profits into PUT options on SPY to hedge against potential downside risk.
Hi, I'm Martin, I focus on maintaining a delta neutral portfolio. I want to be long/short at the same time and benefit from market volatility. I specialize in using options through which I enter and exit trades. I look for market opportunities primarily in small companies, and my search takes me into the waters of mid-sized companies as well.
Analyst’s Disclosure: I/we have a beneficial short position in the shares of SPY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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