The S&P 500 has hardly had a down day, and its cousin Russell wouldn't know one if you slapped him across the face with it.
But take its tech-savvy brother, Nasdaq, and you have someone lost in his ways. While the market keeps scorching higher (okay, "scorching" may be an exaggeration), the Nasdaq has done absolutely nothing.
In fact over the last 8 trading sessions it has remained in the same exact place that it started at. With the weakness that was seen early on today, and the struggle to hold on to 2111 and 2116 (right now it is only holding the former, though it was trading below that earlier too), I've decided to take a short position in PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). Not because I'm setting myself up to the short side for a major market top, but because, everything, for over a year now, where price has climbed above 2100, has resulted in hard sell-offs for the market. I wouldn't put it passed the market to do it again here, so I am using the recent weakness in the Nasdaq as insurance.
By placing my stop-loss above the November highs, I am only risking 1.4% on my position or 0.14% to the portfolio since I trade with 10% position sizes. But I also have three long positions that will mitigate any losses I might incur.
Just thought I'd throw that out there for you all to ponder.