4/25/2020 Markets end the week slightly lower as the VIX drops to the lowest level in nearly 2 months. Bought some PSEC earlier this week.

I hope you are all having a great Saturday!

Although I “feel” bearish here, I’m thinking we will move higher for two reasons. The AAII weekly sentiment indicator is back to being very bearish, with 50% of the respondents thinking we will move lower over the next 6 months. Also, the VIX has dropped from about 45 to 36 this week. 

My upward target is 310, representing another 10% higher. If I were to buy the index here, I would put a stop near or just above 270 with a target at 310. I think that if the index breaks below 270, the low 250s will be retested rather quickly (1-2 weeks), and that is a level where I will start thinking about buying more with my stash of cash. 

Below is the daily chart of SPY:

SPY daily 4_25_2020

Below is the daily chart of PSEC. I entered at 3.81 earlier this week (you can find the post by scrolling down to the previous post) and despite the very nice rally off the divergent low, I still plan to sell somewhere between 5 and 6. I prefer staying in this trade longer than usual because of the monthly dividends. Although I don’t want to pay short term capital gains taxes, I might just sell at 5 and look to buy it back at a lower price. 

PSEC daily 4_25_2020


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