7/31T2:11 Market Comments

Equity markets are off in front of tomorrow's "key" jobs report. Whether it truely is "key" or just a reason for volitility is anyones guess, but we must be prepared.

As I stated in yesterday's blog, I feel we have seen the top in the equity markets for this counter trend rally. So I will be leaning towards building up the short side of the portfolio. However, calling the top has made fools of everyone and I am under no illusions. In light of this admission I will be hedging the portfolio from time to time until it is clear that the down trend has resumed in ernest. As oil sells off today over 2.5% and the markets get ready for the numbers tomorrow I believe it is wise to hedge 1/2 of my short exposure with the use of QQQQ, SPY, DIA.

The object will be to avoid any real damage in the morning with the hedge. However, if the numbers are such that the markets sell off or remain even then the hedge needs to be removed. Remember, this is just a hedge and once it is determined that the hedge is no longer needed than it needs to be immediately reversed.