Short selling into the close was the highlight and reduced our losses from the early long trades. Live trades for the 200K Portfolio were -$1,025 while the 50K Portfolio was -$265. We are down -$1,725 and -$465 on the week and month in the 200K and 50K. We tracked the hypothetical equity curve into a drawdown and then started live trading for August on Tuesday, August 9, 2022.
We anticipated a surge higher to these levels a couple of weeks ago. I thought the move would happen more quickly instead of a slow grind higher.
The biggest question is, "Is the bear market over?"
The biggest fundamental is the Fed's balance sheet which went up again this week by $4.5 billion. That isn't a large number but the rate of balance sheet reduction is much slower than stated by the Federal Reserve and hints at a "Fed pivot" at least where the balance sheet is concerned, even if the fed funds rate is normalized.
Technically, it was nice to see some selling in the afternoon instead of the typical prop and chop. These cycles tend to rotate. The old saying the amateurs trade the open and the pros trade the close, seemed to be the case today. We could see a cycle of more afternoon selling now since it has been awhile and the market is short term overbought.
Psychologically, the market seems to be running with FOMO which is a form of greed. With the excess liquidity still in the system, its possible we could see this market continue to rally.
We are flat at the end of the day and ready to trade it either way for Friday's trade.
The commodity markets mostly trended higher today while bonds dropped as interest rates moved higher. Crude Oil and Natural Gas were the big movers.