The One Million MNS was up 0.1% on the day while the 250K Portfolio was up +$200. The live results on the month are about -0.37%.
The hypothetical results for the Stock Index Portfolio 18 was +$3,375 per E-mini and +$338.50 per Micro. It was good to see the SI 18 bounce off its drawdown.
The market exploded at the open and the gains were steady on the day. It looked like a +500 point Nasdaq Gap Continuation type of day with the potential of 2-3%+ gains in the portfolio as we were up 1.2% early on.
After the Nasdaq Composite hit new record highs, the market reversed. V-Reversal shorts led on the way on the way down. After the Nasdaq futures took out last weeks high, we noticed the mean reversion pattern: the Nasdaq futures reversed after taking out last weeks lows on Wednesday so we anticipated further mean reversion on the day.
We are certainly in a mean reversion market in this pre-election cycle. We gave back some gains on the reversal but were recovering those gains again with short trades, mainly on the E-mini S&P futures with as many as 8 strategies short at the same time. The afternoon chop kicked in with the constant dip buying and days like today "feel like" the market will continue to reverse and try to take back all of your gains. The upside bias seems to pre-empt a balanced mean reversion in the market so we continue to deal with a choppy mean reversion market with an upside bias.
We were able to hold onto some of the gains into the close. It is tricky to stop for the day because we are in the type of market that once a trend kicks in, it can be one of the best trends of the year (up or down) and the moves can come quickly and when you least expect it. It is important to manage it while we wait to sync up with the markets. We have had two challenging weeks in a row with 8 of 10 days being down in our live trading.
The Nasdaq futures seem to like 20,500 as they closed at 20,476 and down only about 20 points on the week, which is surprising with the number of fast moves and realizing the sum is near zero for the week.
The chart of the VIX the last 3 days is wild as the VIX closed above 20, near the highs of the week.
The market continues to play chicken with the truth. It continues to melt up against most technical and fundamental indicators. It is the type of market that could continue to melt up for a long time but could also crash at any time. We keep it nimble taking long and short day trades and limit overnight exposure.
Depending on the market environment and what happens between now and election week, we may pause trading during the entire election week. Tuesday November 5 is election day. Thursday, November 7 is FOMC. Friday, November 1 is Jobs Friday. We certainly want to capture good trading opportunities but if the market gets wilder and the order book thins out, we will pause and wait for the institutional activity to come back.
There are four trading days left in the month and we will work to go positive on the month (approximately -$850 on the month in the 250K Portfolio).
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