With Tech dropping as man, woman and machine alike flog the rotation from growth to value, I naturally wanted to look around for shorting opportunities to maybe hedge my portfolio a little. But first things first… I got rid of some growth stuff, mostly in the form of tax loss seasonal bottom feeds that have not worked in the time frame I’d wanted to see. They are killing the ARKK fund and Cloud ETF, which are emblematic of 2020’s over-valued growth.
Now, more astute or focused traders than I may already be shorting certain areas of the market. But as I’ve noted previously, I will wait for setups before shorting. Headline Tech stock MSFT is an example. A bad looking pattern with weak support at hand. To boot, the there is a gap down there at 310 that will probably fill. But below that, clear support at 305. Then another gap at 295, then the up trending SMA 200. That’s a lot to consider and for my purposes as a macro market guy, too much to micro manage. Yet the chart, uptrending though it is, seems suspect.
Another big Tech captain, GOOG is similar. A loss of current levels would likely bring on a drop through the SMA 200 and a gap fill around 2660. It almost makes me want to short it. Almost. But I am not that guy. You might be that person.
Better for me personally are the market’s rotations and trying to stay in tune with them. If short setups (like a loss of support and bounce/failure to test the breakdown) appear I’d like to short some things. Other than that, as long as the market is intact and rotating, I’ll plan to go with the rotations. For example, the recent add of VZ was a value move. Also, some commodities (ref. yesterday’s uranium update) are doing well and the inflation trades seem to be still ‘on’.
So until the whole of the market breaks (always a possibility in play) I’ll try to stick with its themes, which at this time are rotations (who knows, Tech/Growth may well be back again before long the way this market goes) and preserve capital first, speculate short second.