Upcoming Market Events
Next Thursday marks the last trading day for July, while August trading begins on Friday. Expect more tech earnings next week, along with the FOMC meeting on Wednesday. I anticipate that the market will "wake up" next week. The market has yet to recover from the 4th of July holiday, and the VIX closed below 15.
Current Portfolio Performance
Today, there was a small gain in the Stock Index Portfolio 18. However, there were no trades for the second consecutive day in the Two System Portfolio NQ, which is highly unusual.
Hypothetical Results for Today's Trades:
- Stock Index Portfolio 18: $115 per E-mini
- Two System Portfolio NQ: No trades
VWAP Strategies: A Closer Look
The VWAP Fade It Strategy has performed better than it has since May 1. This is notable, especially since it has struggled for years. Conversely, the breakout of the VWAP bands has historically been a better trade but has not worked since May 1.
Market Behavior Changes
Since May 1, the market has contracted more than usual. This follows the market's reversal from its lows in April. The switch from high volatility in April back to 2019 volatility levels has been abrupt.
If you have not downloaded the VWAP strategy E-book, you can get it on the homepage. The rapid change in market behavior has been extreme. It helps to quantify the current market environment. It's always interesting to determine why a poorly performing pattern suddenly works so well.
Understanding Market Volatility
What Causes Market Volatility?
Market volatility can be influenced by various factors, including economic data releases, earnings reports, and geopolitical events. Understanding these factors can help traders make informed decisions.
Strategies for Navigating Volatility
- Stay Informed: Keep up with the latest news and reports that may impact the market.
- Use Risk Management: Implement strategies to protect your investments during volatile periods.
- Diversify Your Portfolio: Spread your investments across different asset classes to mitigate risk.
Conclusion
As we approach August, it's crucial to stay vigilant and adapt to the changing market conditions. The upcoming tech earnings and FOMC meeting will likely influence market trends. By understanding the current environment and employing effective strategies, traders can position themselves for success.