Sunday, October 6, 2013

Hedge Strategy / Market Trade Duration & Probability Analysis

This is the video I wanted to get out this weekend to better explain what I'm seeing in numerous assets and I use GOOG as this is where I first brought it up. This makes a trend and increases the probabilities which already fit both trend expectations as well as very near term analysis as posted late Friday .

Whether and actual hedging strategy is incorporated or not is a personal choice, if there's a good set up for it, I'll likely try it with a few assets with the ideal outcome being short term long trades using leverage hedge long term trending shorts which will not only hedge the long term trade, but should raise gains via the short term leveraged traded functioning not only as a hedge, but as a trade in itself and protecting a higher, long term probability position. Establishing or finalizing this long term position is probably, at this point, pretty wise as the probabilities of a hard drop are now beyond the normal probabilities by a fairly extreme amount which I believe is the effect or other side of the coin,  that QE has had on the market. For every action there is an equal and opposite reaction, however in the market fear is stronger than green so the equal and opposite reaction tends to be more violent as it takes about 25% of the time to erase the previous action and then some in most cases.

Here's the YouTube link to the video and there's an embedded video player below.

I'll be checking in later tonight as we see what early futures trade looks like.


No comments: