Good gains on the short side today to put us positive on the month and on the quarter. We were up 2.75% on the day when the Nasdaq was down about 2.5%. The 200K Portfolio gained $5,500 today trading 4 micros on the Stock Index Portfolio 26 while the 50K Portfolio gained $1,375 today trading 1 micro on the Stock Index Portfolio 26.
Friday's gap down, continue, and then prop up price action was noted and today we see the follow through to the downside that was supposed to occur on Friday (in my opinion). We were around breakeven on Friday with a list of shorts. Friday's prop up price action limited the natural distribution that would have posted some large gains from Friday's short trades.
The follow through to the downside today was mostly at night and right at the open once again. so our profit opportunities were compressed again today for a day trade portfolio. There was a small sell off in the afternoon to give us the gains on the day, week, month, and quarter.
Price distortion from easy money policy continues to skew prices in equities higher, especially intra-day.
Additionally, 90% of our strategies are day trade and if the majority of the trend occurs at night, our gains will be more limited.
I continue to believe the market should move lower and inflation or Fed tightening will eventually be the catalyst. It was interesting to see the short cycle come through today instead of the constant afternoon prop up. Even though it was a small afternoon sell off, it was a start for what could be more accelerated selling in the afternoon on down days and more natural two sided price action in general.
Just last week we discussed how gap ups and long only trades have worked extremely well the last four months and how we are due for a good short cycle.
Holding short trades all can be challenging psychologically after we have gone through a long cycle of mostly losing on the short side.