In a nutshell:
1. Look for the market to correct here and begin to cover your remaining hedged positions.
I do not think the correction will be very deep, but anything is possible. Aggressive traders can look to go short in here. We went short on Friday.
2. The market made an impulse move off the lows, so this decline should be nothing more than a corrective wave and the major intermediate term low should be in place.
3. If the most recent lows are taken out, I will get downright bearish and continue to apply my hedge. However, the data that we are getting from the commercial traders does not point to a time for any type of bear market, not to mention that the camp of here goes 1987 all over again is growing in size. It may have some similarities time and price wise, but the mother of all indicators....THE COMMERCIAL TRADERS NET INDEX is nowhere close to where it was in 1987. In 1987, the big boys were selling strongly in both July and August! Just the opposite holds true today. They have been very strong buyers and they make the big money so it would be silly to bet against their positions.
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