Hypothetical Trading System Signals on October 4, 2022 - Twilight Zone Trading


The hypothetical results today are -$3,400 and -$850 in the 200K and 50K Portfolios. The market environment seems to have a "twilight zone" mindset. All of a sudden there is massive bullishness in the market on this bear market bounce. On June 16th, the bulls imagined a dovish Fed that was about to pivot. It never happened and now that we are back at those lows, the bulls are once again imagining a Fed pivot.


Maybe the Fed will pivot. I hope they don't. 3.75% is almost a normal interest rate.


The market is very choppy and seems to be intentionally difficult, with massive stop running patterns and prop up price action.


We still track this difficult market's hypothetical trading system signals but we are not live trading right now. Many of the long trades were stopped out on a fast move lower mid day.


We have never had real capitulation because capitulation would indicate a change in trend. The technical and fundamental trend is down. The liquidity and sentiment are bullish and working to call a bottom.

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