Astute Strategist Blog

Market Context
Good day all,

As we get to the last week of February, we are looking at the indexes advancing to higher highs. Take into consideration the words of a dovish Fed along with the mention, rumor or slightest hint of China trade talks being optimistic its no wonder that for the week, indexes have made a greater than 1% move up.

The Dow closed the week above 26,000 and the SPX above 2790, this is indeed very bullish. Our levels to watch were for a close above 25,970 and 2782 for the Dow and SPX respectively. We have of course closed above both, so now are off to the races? It would seem the next objective for the market would be a close above 2800, if we do close above that level we could easily see a test of 2815-2820 area where when last visited we saw a double top, followed by our mid-November through December sell-off.

Could we see volatility again soon? Your guess is as good as mine, but I will say, that having long stock and positions that are unhedged when this market really could turn on a dime could leave anyone uneasy, and with this market being up some 11% for the year, ask yourself one simple question. Do you want to leave all that profit on the table?

Enter the wonderful world of hedging against volatility. Right now it is almost unanimous amongst investors when stating “It’s ok I am in it for the long haul”. If that is the case, why not execute the power behind options that allow you to amplify the growth of all the monies in RSP, TFSA and IRA accounts? After all, you worked damn hard enough to earn it.

The Astute Millionaire weekly online class starts next week, where we go into using options to hedge/protect long stock and most importantly your money. Now, I know it is not even close to Thanksgiving but are you ready for the gravy? At only $79/month that is less than a cup of coffee a day. Join today, don’t let your monies be apart of the volatility crush, take part in the volatility rush!

Risk & Reward
Below is a chart of the SPX from the lows we saw in the last week of December to now. My weekly lyrical tribute to the market comes to us from Bon Jovi’s, Livin’ On a Prayer, “Woah, we’re halfway there. Woah livin’ on a prayer. Take my hand, we’ll make it swear. Woah livin’ on a prayer”. I will close with something my father repeatedly said to me “No one ever went bankrupt protecting profits”. Enjoy your weekend!