If I was still in the markets I wouldn’t sell now. I think the S&P 500 is close to a
bottom. Unless the prior low of October
(1862) fails, I don’t think the market goes too much lower than Tuesday’s
close. Even though my “system” says
sell, I don’t think that’s a great idea with long-term money. It doesn’t seem like a total bear market is
here, yet.
One can certainly trade the bounce and up and down moves
that may be ahead. I will buy XIV (the
inverse VIX ETN) if VIX spikes above 40.
I wanted to do it yesterday, but I didn’t get home early enough to make
it happen. Unlike VXX (ST Futures ETN),
XIV gains value as it gets closer to Options expiration. VXX loses money even
if VIX is unchanged due to the higher cost of repurchasing expiring
options. This is a high risk move so
keep investments in XIV small relative to total investment portfolio.
I'll look for the best opportunity to get back in with my long term holdings.
