Non-Farm Friday – Checking our Hedges into the Weekend

October 6, 2023

2001

$51,120!

That's how much our Long-Term Portfolio (LTP) lost (10%) since our Sept 12th review as the S&P 500 plunged from 4,536 to 4,258 (6%) in the last 3 weeks. FORTUNATELY, we were already bearish and we also made the right adjustments to the Short-Term Portfolio on the 26th to lock in our gains and the STP has gained $83,400 over the same period.

Of course the STP protects our other Member Portfolios as well - the simple point is to have cash available to adjust your positions with (and go bargain-hunting!) when the market is down. Our adjustments on the 26th locked in our gains and rose our CASH!!! position from $151,435 to $272,445 - almost double - because we took the profits from our long ultra-shorts and left the short ultra-shorts hang out to dry (and expire).

We expected 4,250 to be an inflection point and, even if we were wrong, we could see the rising 200 dma would be over 4,200 and that would almost certainly be support and since we fell from 4,600, the bounces would be 80 points, back to 4,280 at least (weak bounce) so there was no sense in not taking profits at 4,250 last week, was there?

Very simply, HAD 4,200 failed, there would have been very little damage done and we would have put the cash back into our hedges but this way, we have that cash ready to deploy and we did do that last Thursday, when we picked up a dozen new long trades for our Member Portfolios. As we had plenty of CASH!!! in our portfolios due to our overall caution - we haven't had to touch the money in the STP - yet.