Trading System Signals on June 12, 2024

We did not trade today since it was FOMC Day. The Nasdaq had a massive surge, most of it during the pre-market on CPI and after the close on Broadcom earnings. The gain on the Nasdaq intra-day from the 9:30 am EST open until the 4:00 pm EST cash close was about 102 points versus the 308.25 point gain on the Nasdaq futures.

We have "cast a broader net" this quarter to capture big moves overnight and in the pre-market instead of just day trading, but we still don't trade on FOMC. In hindsight, today was more of a CPI day than an FOMC day. It is rare to see FOMC and CPI on the same day. In hindsight, the most optimal way to have traded today would be to trade the overnight strategies, capture the surge on CPI, and stop trading when the day session started. Trading news events is an asymmetric trade since it is usually an instant move. If you are in the trade, you can make the instant gain or take the instant loss with big slippage.

Some of the overnight and pre-market strategies had long signals for the pre-market CPI surge. The day trade session chop really took its toll though and would have given back most of the gains, while the after-hours surge on Broadcom earnings, would have added some gains since a few Nasdaq strategies (VSD Breakouts) still had long signal in the after hours.

This is a discussion of the hypothetical signals since we did not trade live today. We are usually right to not trade on FOMC and the Portfolio Calculator shows that the overall risk is higher if we trade on FOMC. In the past year, we have seen some trendier FOMC Days though. For now, we stick with the averages of not trading on FOMC unless the trend changes significantly.

The VIX dropped to 12.04 and the stock indexes continue to resolve higher with the backing of liquidity as well as greed that could turn to euphoria. Twenty five years ago, it was 1999. The dot com bubble was not far away. Its the type of market that you want to take advantage of as a short term trader by capturing the long side if it goes parabolic while protecting your gains and capturing shorts if it crashes.

A 25,000 Nasdaq 100 futures is only 27.5% away!

We have three new strategies for Silver that we want to add to the One Million MNS portfolio.