It’s not defensive, but Software was a beat down offensive getting a rotation bid. Defensives like Healthcare are doing quite well. As I hold those, I want to tweak the strategy a bit.
It can be so frustrating shorting the broad SPX for the simple reason that it includes most sectors, from Semi to Tech to Industrial to Healthcare/Medical, and so on. SPX tends to rotate its way from trouble. But that can be temporary. Obviously SPX has remained aloft because of its more defensive and rotational sector components.
So in this case I shorted it (SPXS) to hedge in the event that the gathering market correction starts to kick more legs out from under the market’s table. In other words, shorting the whole market will better hedge my long positions that have been doing well. It’s a logical theory, at least.
So I sprinkled SPXS in there to theoretically button down a portfolios that are doing just fine,* considering the current backdrop. I just want to guard against the idea that the correction may not end until it dings everybody. We will see soon enough.
* A little off the top of the IRA and savings just sort of hanging around even.
