We did not trade today as we have paused trading to lock in profits on the quarter and on the year. December has been incredibly choppy and difficult to trade. We are personally taking a break to focus on research for 2023.
The portfolio setup has been profitable on the year taking trades on the FOMC meeting and policy statement days so far this year. The chop of December continued today and the strategies were down on the day in the prop and chop trading.
The market kept trying to rally, generating false breakouts as the strategies kept taking long trades that were stopped out.
Jay Powell was much more hawkish than expected and the market still closed higher than where it started trading when the policy statement was released at 2pm EST. Hawkish is typically more bearish but the contrarian bullish liquidity continues to step in.
Personally, I'm bearish but thought the seasonality would drive the market higher into the end of the year. The inability of the bulls to move the market higher with all the "propping up" is really bearish in my opinion.
The ideas that we have discussed this year for "gradual and then suddenly" are something to consider as the one thing that would surprise most investors is a second year of this bear market with even stronger selling. In my opinion, we never had a real bear market cycle the way we have seen in the past and technically speaking, we are due for more downside.
The S&P strategies did not trigger any signals while the Nasdaq strategies for the Stock Index Portfolio 16 + BLITZ 5 had the following results for the E-mini Nasdaq:
Viper 2021 E-mini Nasaq = -$1,250
TICK Pullback E-mini Nasdaq = -$1,735
TICK Reversal 2023 = -$2,080 TICK Reversal = -$2,055
Momentum Reversal E-mini Nasdaq = -$1,250
Total = -$8,370 as the Nasdaq strategies went 0 for 5.
My recommendation is to trade small or not at all.
This price action reminds me of June. We had a massive runup March - May of this year and then the first half of June was incredibly challenging and we paused trading. The market started to trend better the second half of June.
The Stock Index Portfolio 16 (without the BLITZ 5) is in a 17k out of 26k drawdown per E-mini and the best setup to trade for January at the moment if January started today. Our latest research will "dial in" this approach and potentially use intra-day portfolio stop loss levels using our Money Management Algorithms.
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