The market was choppy during this shortened week. It finally gave in today. SPX and RUT closed down -1% and 1.35% respectively. Both of them retested yesterday's highs and failed. And both of them closed below the lows of yesterday. It looks like a current trend top is in.
Unfortunately, I wasn't able to exit any of my long put. Now the pressure switched to the downside. Our portfolios suffered big drawdowns. My net liq is barely above 120K. The leverage is above 5 for the first time in January. My excess liquidity is only 1.3K. I have to deal with it on Monday. I have spent too much money on hedging. The only way to reduce it is to reduce the size.
Assuming this may be a 5-10% pullback what should I do to reduce my risk. The previous lessons are should be remembered. One is to act early when a trend changes. Should I reverse a couple of longs to shorts? Then watch for the trend change again. I will work on my solutions over this weekend.
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