Sitting on my hands prior to the holiday

I’ve nearly pulled the trigger today on adding some shorts. Then I decided against it because there’s no action in the market and no good confirmation. My 50% long, 25% short, and 25% cash distribution seems alright for now. But Figure 1 below leads me to want to add more to the short side.

As shown in Figure 1, the market is still clearly in a downtrend. Moreover, we are at the top end of the channel. So shorting at this point has a good risk/reward ratio.

S&P 500 ETF

In particular, Goldman Sachs in Figure 2 seems like a decent play.

Goldman Sachs

But as I was saying, I’d rather wait for GS to break the triangle first before making a move. With the current market, it’s better to be late than early.

Related posts:

1. Goldman Sachs, is it up or is it down?
2. SOLD -1 GS 100 APR 09 105 PUT @9.55
3. Market Weekly Review: March 17, 2009
4. BOUGHT +1 GS 100 APR 09 105 PUT @8.72
5. Goldman Sachs fooling around $110