US stock market had a " super bullish " first half...
Based on trading pattern of last 7 days, we are in a " cooling off " zone
@ best this pattern can be described as " neutral "
We may see rotation on a daily basis...thus a " daytrading " market
Earnings reaction has been " yawn " on better and " severe " on below expectations
Only " major surprise " was rewarded with 8% positive.....
SO....the trading environment has changed....
It IS important to understand this change and adjust further in terms of exposure which I may do on Monday...
It is NOT wise to have 100% exposure all the time, since I do NOT SHORT or play INVERSE ...I tinker with exposure based on changing trading environment...
I see this trend continuing more or less till October
Many sectors have been hyped to the hilt and deserves a REST
In case of my latest read of RSI, here is what worked and what is struggling in my universe of 7 sectors :
XLE is an absolute winner with RSI of 64.46
XLF is second best with 55.89
DOW is third best with 54.83
RUSSELL 2000 is 4th 54.71
Absolute last is S&P 500 with 47.94
2nd last is Nasdaq with 48.64
As any good lawyer always writes " govern accordingly "
Good luck with your analysis and INVERSE views.
BLOG does NOT give buy or sell.
Saleem
4 comments:
Hi Saleem,
Last week: +1.08% (YTD: +97.63%)
Portfolio Leaders: the shorts
Portfolio Laggards: the longs
In a week that saw moderate pullbacks in all indices, the portfolio did relatively well due to the short positioning. We've seen some decent earnings be met with declines, an indication of the good news being already "priced in", and the 10-yr jumped (even with the Friday decline) on the US debt downgrade along with major supply coming this quarter. The jobs report on Friday was roughly in-line but with wage growth and unemployment rate showing further signs of a very tight labor market. Coupled with creepingly higher commodity prices, we need to be on alert for a downshift in corporate earnings and/or a persistently hawkish Fed in light of mostly good economic data still. CPI/PPI are out this week and are expected to bring welcome news again - we'll see how the market reacts. The earnings season mostly finishes this week, and it will be time to take stock and look for year-end winners.
Holdings: SQQQ(x3) JETD(x2) TZA(x2) BMEA TYGO HIMS ZENV(x0.2), cash 0%
As/if the market drops further, I will lighten up on the hedges as they will have accomplished their mission, and use the cash to deploy into year-end ideas.
Stocktrader
Hi Stocktrader,
Last week Down 15.09%
YTD UP 112.48%
Saleem
Hi Stocktrader,
Sold PLTR @ $18.25 in pre market.
Saleem
Hi Saleem,
Good luck with next position!
Stocktrader
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