Getting Cute

You know my stance by now.

It’s a Bull Market.

That means the MAIN focus is staying in sync with primary trends and using pullbacks to add, not subtract.

But this week?

It's loud.

Four of the Magnificent 7 report earnings.

A flood of economic data.

And Fed Chair Powell's lurking too.

That's a cocktail of potential risk.

So yeah, I’m being a little cute.

Not cute like “top calling.”

Cute like adding a little volatility exposure while the market’s leaning one way.

Will it backfire? Maybe.

But I want to be real with you.

Look at this chart:

The S&P 500 keeps pushing to new highs.

But the percentage of S&P 500 stocks above their 20-day moving average is diverging.

That’s a short-term breadth divergence.

Nothing fatal but it gives me a reason to tactically layer in some protection.

Add to that: the $VIX is extremely compressed.

Historically, that’s when optionality is cheap.

Meaning, there is very little risk being priced into any of these events.

If I’m going to hedge, I’d rather do it before the spike....not after.

Think about it probabilistically:

Even if the odds of a volatility event are low, the market is pricing it as if it's impossible.

That’s when hedging becomes a value play.

This isn’t about turning bearish.

It’s about understanding context.

My short-term model has a structure for this kind of play, and I’m following it.

I’m not selling core exposure.

I still want to buy dips.

But I’m also respecting the setup in front of me.

Sometimes the gut whispers.

This week, it’s whispering, “hedge a little.”

Cute?

Maybe.

But calculated.

Anyways, that's my two cents.