Tug of War

A classic tug-of-war is not only going on in the trading pits, but also in my head. The market has not bottomed yet. It is technically broken and has to eventually go down under maximum fear to go up. At least that is what history tells us. The problem is that markets don't go down in a straight line and rallies happen.

The fear readings are acting funny. The VIX chart clearly looks like it will go higher (bearish), but it is currently not tracking the market well. The market internals are horrible with only a small amount of stock currently reflecting the daily close numbers from yesterday (for most longs, all they saw was a red screen yesterday afternoon even though the index was green).

My technical indicators are telling me that fear is still not pervasive enough to bottom and bounce effectively. So what to do? The market opened higher and I peeled back some of my AMZN puts to be safe. I also dipped my toe into AAPL calls long using AMZN as a hedge.

Do I sound crazy? Well, I certainly do feel it. Still in a lot of cash. A 1-2 day snap back is not unexpected, just unnerving as a short.