I continue to hold my 100% short portfolio (restored to 100% after the sale of SWHC) on the thesis that the technicians calling for a bottom here are wrong. The VIX remains very low. Bullsh*t dip-buyers are too comfortable and complacency is high in the market. I believe firmly that we will not bounce until we see 6000 on the DOW and a verticle VIX, possibly tagging the 75 area. When that takes place, I'm going all into cash.
Watch for the VIX to begin igniting higher this week. Like I said last week, this market has become highly complacent. Watch dip-buyers run for the exits as we plummet through 7000 on the DOW. Right now, portfolio directionality should be skewed short with perhaps a few hedges in a case of a squeeze (though I dont think we'll see one and for the record, I have not a single hedge).
Again, DOW 6000 with VIX of 75 looks to be a good allignment of stars to cover shorts. After that, who the hell knows.
The bottom line is there has been a paradigm shift in America. It's sad, but the country is ruined.
Some snippets: "As these charts show, a big burst in statistical volatility does not necessarily lead to a long-lasting market bottom. In fact, in 3 out of 4 instances, the market eventually moved decisively lower." "The one time that the market did not drop further was in 1987."
My interpretation is that the prior spike to high 80s does not signal a bottom and we can continue to bleed for quite a while. Like 1907 the vix may spike up to lower high nearer the bottom. Worth a read.
BTW damn I wish I had followed that SWHC trade, you beat the crowd.