Weak Close

I think we felt this one coming all day. While we managed to eek out small gains on the major indices, selling accelerated as the day unfolded and really picked up into the close. There is nothing to hang your hat on right now. I'd be as defensive as possible. I believe we are near the lows for the year if we don't enter a global recession, but I think we have about a 45% chance of doing so. If we don't enter recession, we could see 25% up on the S&P from here, but conversely we could see another 20% down if we do. I'm still 90% cash but have put some shorts on in the energy sector using the Ultra-Short Oil ETF (SCO). I'm also short the NASDAQ 100 ETF (QQQ) and long the Gold Trust ETF (GLD).

This is not a recommendation to buy or sell any securities. DAK was long SCO and GLD, and short QQQ at the time of publication but positions can change at anytime.