Let’s look at the volatility of it all.
I lost 11 basis points in my PA yesterday and walked through that situation in the Early Look in detail where I also discuss my top 6 positions. You should subscribe to that to get this information.
All six of those positions are great relative to being long a big position in the Nasdaq (which I took down exposure to right on time).
What would get me to buy the Nasdaq?
In our Risk Ranges, you’re seeing a bunch of neutral trends show up in Tech names that make up a large percentage of the Nasdaq, components such as Apple (AAPL) or Microsoft (MSFT). We have to wait and watch on this.
Volatility would have to break down quite considerably for me to get interested, but that doesn’t mean we forget that it’s Quad 3 economically (an economic environment in which our backtests suggest Tech is a long).
Deep Quad 3 would be bad for Tech and if we shifted to Quad 4 that would be really bad.
Remember that deep Quad 3 is a possibility, and that is a place where volatility will remain very high in not just the Nasdaq, but also other equity exposures like Utilities. If volatility remains high, the whole broad based complex of U.S. equity volatility becomes uninvestable.
Remember that part of the game folks.