Live Trading System Signals on 05/21/2025

When developing trading systems, one thing to consider is how the bond auctions affect the stock market. Sometimes news events like Bond auctions don't affect the market, especially during a long steady state period where interest rates stay the same. As interest rates persist higher, Bond auctions at mid-day can have become more of a catalyst for the afternoon trend in stock indexes. This is how markets can change and why a strategy might work during a certain period of time and not be relevant or even generate signals during another period of time. (Ex: A stock index futures triggering off of Bond futures trends).

The Bond market was the news today and the mid-day Bond auction disappointed, sending rates higher and reversing stock indexes from a steady rally to some rapid selling. It is interesting to watch the sell offs. During selloffs, the market can hit a certain level, and then it looks like desperate human effort to hold the market up. The price action seems to move faster and faster until it is able to reverse the down trend. The dip buyers stepped in today around 1:30 pm EST and the down trend became more choppy but it still persisted lower after it looked like it may reverse higher once again.

It is curious that after such a strong runup, why there is a concerted effort to prevent a healthy pullback. The Bond market and the US credit rating have been the news this week that was dismissed on Monday and Tuesday by bold and eager contrarian dip buying fueled by FOMO. One of the new terms is "rage buying". The gravity of the fundamentals has started to weigh on the market as we move to the second half of the week with discussions on the US Dollar as the worlds reserve currency, further US Credit rating downgrades, and the Japanese Bond (JGB) market hitting all time high interest rates.

If the Fed is buying bonds in the stealth QE program we discussed, they will have to increase their buying to support this Bond market.

On April 9, the Nasdaq 100 index closed about 2,030 points higher than its open. This was about 6 weeks ago. The volatility is still in the market for a similar move that could happen on the downside. Even 1/2 of that move would be considerable. It is important not to become complacent. The close from April 9th is approximately 2,000 points lower than today's close in the Nasdaq 100 index.

The One Million MNS was up about +2.0% on the day while the 250K Portfolio was up $5,000. The strategies had a nice gain on the long side and then gave it back as the market reversed but went positive again on the short side as the market moved lower.

The hypothetical results are shown below for the portfolios with $25 round turn slippage and commission:

Stock Index Portfolio 17 (1 NQ) = +$7,585.00

Stock Index Portfolio 17 (3 NQ) = +$22,755.00

50K Portfolio = +$6,325.00

EMINI NQ 2 System Portfolio = +$1,975.00

EMINI NQ 3 System Portfolio II = +$700.00

EMINI NQ 4 System Portfolio = +$2,425.00

EMINI NQ 5 System Portfolio = +$950.00

Gold was up another 1% today and the VIX was up 15% with a high of 21.05 and 30 Year Bonds (US) closed on their low of 110^24.