The One Million MNS was down -0.78% on the day while the 250K Portfolio was down -$1,550 on the day. The live results for the month in the 250K Portfolio is approximately -0.22% on the month (or -$557) in trading profits. The One Million MNS 128 is still at a good drawdown entry point. We started trading the 128 strategy setup yesterday. The hypothetical results for the One Million MNS 128 is about -2.3% on the month while live results are about -0.22%. The current risk to worse case drawdown for this portfolio is approximately -1.6%. The markets have been extremely unfavorable the last 7 trading days. Six of the last seven trading days have been down days. We are looking for a favorable cycle after a streak of challenging price action.
We prefer favorable price action all the time but work hard to navigate challenging price action with the portfolio rotation approach we describe in this blog on a daily basis. The strategies in our portfolio take advantage of trend, counter trend, and mean reversion price action. Even when the market moves in trend, counter trend, and mean reversion patterns, we can be out of sync with the markets and go through drawdowns.
The stock index strategies in this portfolio were profitable today. It was the metals that were the big losers on the day with about -0.75% in both Silver and Gold. We like to buy dips in an uptrend in some of our strategies. The precious metals pulled back in a big way today, stopping out many dip buying long strategies. Silver futures were down more than -3% on the day.
The hypothetical results for the Stock Index Portfolio 18 was -$1,890 per E-mini and -$134 per Micro. The Silver SR CounterTrend strategy for the Micro trades 1/5th of the size instead of 1/10th (like most Micros) so the Silver trade today was +$475 while the Micro Silver was +97.50. This portfolio is at a worse case drawdown and could bounce or could continue into a drawdown. The best way to trade this is to continue to trade it (and add more contracts where capital allows) with a tight stop loss or pause and wait until November 10th, when the election and FOMC meeting are over. The markets have been unusual in pre-election trade and it is difficult to quantify this type of price action other than sloppy and stop running.
The market seems to always try to put in a significant V-Reversal on a daily basis. It has been awhile since we have seen a typical trend cycle where the market closes on its lows. Today, the stock indexes appeared to be in for a "sell into the close" price action but after many of our long V-Reversal strategies were stopped out and the shorts were doing well, the market put in a V-Reversal starting at 2:20 pm EST. While the net results in the One Million MNS 128 was down, the stock indexes posted positive gains with a series of short trades into the lows with some additional longs based on the V-Reversal (Momentum Reversal and Adaptive Moving Average).
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