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Time To Hedge?
The S&P came into Tuesday having gone 16 straight sessions without an up or down move in excess
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Another dead-flat day today (so far), but VIX has been slowly creeping up. There’s definitely appetite for insurance out there.
I bought vol today, so I’m a minuscule fraction of that. I chose Russell 2000 Sep 30 puts. Pure speculation. I have a lot of short term cap gains this year, so if they go bust that covers about a third of my losses. If volatility rises at any point to where they are significantly in the money I’ll sell enough to cover my basis. Following McElligott through these pages, it seems things often work out the way he suggests the odds suggest they just might.
The first streak I got to experience began on Feb 9, 1966 when the DJIA reached 1000 on an interday high for the first time in history. It closed that day and 995 and never reached that level again, not even for a minute, until 10/11/82, 16.5 years later when it closed above 1000 for only the second time ever. That’s a streak. It more or less forced me into very conservative positions until the early 1980s when I switched entirely into T-bonds, bought at discount with high personal leverage. The next ten years in that strategy — (the Volcker years) paid for my retirement and sent me to stage two.