The 250K, 60 Strategy Portfolio was down -$325 on the day versus a hypothetical of -$1,060 with Silver, Gold, and Crude Oil giving us some net profits in those markets while the stock indexes continued the wild trading that we have seen the past couple of weeks. There were some positives in the V-Reversals. We were up on the day early and it looked like we could get a strong down trend to take out the weekly lows as more inflation data (PPI) shows higher inflation to match the CPI data from Tuesday.
The bulls do what they always do; bias the data to meet their narrative. When inflation was rising, they called peak inflation after every monthly higher inflation reading, trying to call a top for nearly a year, and being wrong for a year, trying to capture the V-Reversal down in inflation. With one tick higher in inflation the narrative is, "its just a one-off number", "inflation could not move higher once again". The dip buying stepped in and ran the market up into about an 80% retracement stopping out a couple of shorts. EVP-1 NQ was very profitable on the short side today. The market rolled over, then rallied again and then tested the lows on the day in the last hour.
Historically, we would see distribution days where there was a counter trend rally higher but not typically 80%, followed by a second leg lower exceeding the lows of the day. With the bullish bias in the market the counter trend rally resolves into a V Reversal choppy day instead of a normal distribution day that has more steady selling throughout the day.
The Stock Index Portfolio 27 E-mini was -$4,715 with only one winner.
The Stock Index Portfolio 27 Micro was -$470 with only one winner and the same trades as the E-minis.
It's unusual to see the consecutive winning streaks in the market and constant bid trying to turn every day into a winner. Strong bull markets are normal but are typically a little more two-sided.
I'm working on some portfolio updates for this market to help us get back to equity peaks and keep our risk down including the V-Reversals.
NVDA earnings are next week. This market has surged recently and driven the Nasdaq higher. It is interesting to consider a downside surprise in this market and how it could affect the Mag 7, the Nasdaq and our trading. Its always fun to price the options and what if scenarios for big moves in either direction. Typically implied volatility is so high around earnings that these trades are more of a gamble.
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