Friday Sept 2, 2011
Today is a tough call. I can make a case that this is a necessary correction in an uptrend that should last into mid September. However, on the other hand I recall Labor Day weekend 1986. The markets were up that Friday and completely fell apart when we returned that Tuesday. Our fear indicators remain elevated with VIX at 32 and TLT still high.
I have liquidated about half my long positions taking profits in QQQ. More updates over the weekend. If we fall apart next week we have taken defensive action today which is regrettable given that it is a down day. Still buying at the extreme low we are still in profits.
If we open up next week, the markets will still be open and positions can be bought back.
Perhaps the most worrisome aspect of this is the weak oil market today. Oil is usually the leading indicator as it is such an emotional market.
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