The drawdown phase continues with four losing days in a row. The week is characterized by narrow and sideways choppy price action as well as wild price action on FOMC and has been between one extreme or another with massive VIX Divergences as well.
I read an interesting article from a financial journalist this past weekend indicating that October 28 - November 2 is one of the most bullish five day periods during the year especially when the stock market is down. The indexes are down 5% and 7% this week.
This type of price action and indicators can precede a hard crash. I'm not saying it will happen but the price action is really different than what we normally see and doesn't make much sense. There were still many perma-bulls calling for an end of year rally just two weeks ago. The market could roll over now instead.
The Nasdaq futures are about 250 points away from those October 13, 2022, CPI lows with Jobs Friday tomorrow morning at 7:30 am CST.
It's difficult to determine how next week's mid term elections would affect the markets. Soybeans and Crude Oil daily charts look like they are poised to move higher (along with inflation) after a multi-month pullback from the highs. I believe this is why Jay Powell's press conference was so hawkish yesterday.
The Fed's balance sheet dropped $46 billion this past week. The Fed now seems to be on pace with their commitment of the balance sheet reduction in order to fight inflation. The long term effects on the balance sheet reduction and rise in interest rates on the stock market will be interesting.
The 200K Portfolio was down -$3,450 and the 50K Portfolio was down -$1,150. The results were better than the hypotheticals which were -$4,090 and -$1,227 respectively.
The S&P strategies were 1 for 2 and the Nasdaq strategies were 1 for 5.
The drawdown alert continues as we are 5k (per E-mini) away from a max drawdown in this portfolio setup.
It was good to have results better than the hypotheticals as a surge in price at 9:00 am on ISM services gave us a much better fill on a short signal for Viper 2021.