Last time, we asked whether the recent trend has seriously been broken. Only a few days later, it doesn’t appear so. As you can see from the chart below:

• the SPY is back to hugging the upper limits of its Bollinger Bands
• the On Balance Volume reading we were wondering about before has only pushed higher
• and the ADX gives no signals that we’re entering a range-bound market.

That means we’re still in an environment that is a bit more dangerous for market-neutral traders like us. But it also means that if we get a significant correction of the next couple weeks, we should be well poised to profit while others (you know, the permabull longs you see on TV every day) take the hit. The basis of our entire strategy, remember, is to stay well hedged, take in income over time, and reduce our risk.