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Live Trading System Signals May 13, 2024

The live trades for the day on the One Million MNS 110 were -$800. The live trades for the $250K Portfolio were -$160. We started live trading again today after an intra-day drawdown on the One Million MNS 110. The hypothetical results for the One Million MNS 110 was about -$5K and the hypothetical results for the 250K Portfolio was about -$1k. The portfolio retraced to the same level it was when we paused on April 26. It ran up about 33K since April 29th and then has pulled back about 33K through todays trade based on the One Million MNS 110. This puts us in the portfolio about 25K per One Million away from a worse case drawdown. This is about a 5K risk on the 250K Portfolio (2%) from the worse case drawdown.


The Stock Index Portfolio 18 was down -$240 and is almost in a 12K drawdown from the last equity peak. We recommend starting now or waiting for a 15K drawdown. The historical hypothetical worse case drawdown is -29.8K.


This weekend, we did not find any significant CPI trading patterns for making portfolio decisions. We are working with the base approach for trading the portfolio based on starting during a drawdown. Looking at the CPI history over the past year, if it has been in a drawdown or narrow price consolidation in the market, which it has, it can generate some good moves that are potentially profitable post CPI. If the portfolio has some nice moves and went into CPI at equity peaks, it could be come choppy and start a new drawdown cycle post CPI.


What is different about the inflation readings this month is that the PPI will be released on Tuesday (tomorrow) while CPI will be released on Wednesday. Most months CPI is released before PPI. The market seems to be very narrow and sideways intra-day the last 5 days while waiting for the economic reports that will be released this week.


Inflation sems to persist more than consensus expectations and the Fed rate cuts that have been anticipated for a long time continue to be evasive. The Fed wants to be neutral going into an election, so typically a rate cut after a long period of hikes and pauses would appear neutral. However, if inflation persists, as it appears to, rate cuts could accelerate inflation even further, penalizing the incumbent candidate.


It was interesting to see the spike again in GME with Roaring Kitty coming back on the scene. Meme stock runups were part of the price action that previously led inflation.

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