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Trading System Signals on 12/01/2023

The trading system signals were on target capturing the move today and the last two days. The Portfolio 49 has been updated to include Cobra Crude Oil. Cobra Crude Oil did not trade today. The Portfolio 49 and Portfolio 48 both made equity peaks today as it started the day in a -$1,667.50 and hit gains of $5,972.50. This is what we want to see in our portfolio setups as it is validation after going through a season of wild chop and multiple portfolio adjustments.


When waiting for a drawdown, we anticipate that we will see some profitable hypothetical signals first. The goal of waiting for a drawdown is based on reducing initial risk in account equity and the right way to start a new portfolio setup. It is not an effort to time the market or to make sure we capture every move (FOMO). It has served us well. 


The gain in this portfolio on a hypothetical basis since November 17 is +$7,780. Even though we anticipate these types of moves at the beginning of the month associated with gains, we still wait for our 10-12K hypothetical drawdown to start. A 10-12K drawdown will put us back below the November 17 entry price. 


Volatility is extremely low and could remain low since low VIX readings and smooth uptrends occur at this time of year. Typically, this is the type of market we see when Fed monetary policy is easy instead of tight and became accustomed to during QE. I anticipate more volatility in 2024 after the VIX traded around 12.5, while monetary policy remains tight and fundamental economic conditions remain bearish. 


This is an interesting graph comparing the stock market to economic conditions from zerohedge.com.


The red line representing "Hard" economic data hit a 14 month low in the midst of a stock market rally in November to highs on the year. Bad news is good news. The stock market believes bad economic data will cause the Fed to cut rates. The Fed speak today maintains a tighter policy. It will be interesting to see the path and direction of convergence in these two data points going forward.



The long term trends in economic data are not part of our trading system signals but extreme divergences in the data like this help us maintain perspective and a balanced approach in the strategy selection in our portfolios.


The Portfolio 49 Hypotheticals were +$5,972.50


The Stock Index Portfolio 27 Hypotheticals were +$3,352.50


The Stock Index Portfolio 27 Micro Hypotheticals were +$326.00


The Micros and Emini signals matched on the Stock Index Portfolio 27.


The Portfolio 49 E-mini S&P strategies were up about +$9K while the Nasdaq was down about -$4k. Silver hit a $975 profit target. There was only one commodity trade in Silver today.

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