The Game has Changed from Where it Was
The higher volatility is now allowing for greater trading opportunities as many ETFs, especially SPY moved from oversold to overbought and back to oversold this week.
Overall the change in volatility we began discussing in July is continuing to play itself out with the market looking more and more like 2007. I don’t believe we will see a 2008 but I do feel that higher levels of cash, proper position sizing, and selection of high quality instruments becomes even more important now. As markets and volatility speed up, the best course is to slow down. You can do this by increasing your cash positions, lowering your normal position size, and making sure you focus on the better, higher equities and ETFs. Until proven otherwise, the game has changed from where it was from 2013-June 2014.
Today the market is short-term oversold. The opportunities are in scaling into the higher quality US index ETFs.