The V-Reversal short today was the top trade of the day, capturing about 100 points on the short side in the E-mini Nasdaq. This strategy can be traded for you in the Auto Trade program or as an individual subscription.
The Dow broke its 10 day losing streak with a very small bounce today +15.37 or .04%. The market breadth for S&P 500 stocks was lower again for 14 days in a row and 100% of all trading days this month. The market was tightly wound today and the perma bulls are ready to run the market back to new highs and "back up the truck" for the Santa Claus rally. The sentiment remains bullish as the words "oversold" come out more quickly in a bull market than "overbought" in a bear market.
Today looked more like a market that was trying to sell off further but was propped up. Recency bias would leave traders to believe that this is a dip buying opportunity. Maybe it will be. The constant fast reversals the last few years are the recent trend but not the historical basis and there will be time periods where there are longer and steeper pullbacks in equity markets, especially with hawkish monetary policy. The VIX remained elevated but down on the day and settled in the 24 handle. 30 Year Bonds continued to trend lower.
Tomorrow is quadruple witching Friday which has a very bearish signal 65% of the time testing back 10 years.
The live trading system signals for the One Million MNS was +0.185% while the 250K Portfolio was up $370. We focused on the V-Reversal trade and considered several attempts to sync up with other markets and strategies.
The hypothetical results for the Stock Index Portfolio 18 was -$950 per E-mini and -$95 per Micro.
The hypothetical results for the Top 50 Select Portfolio was -$8,057.50
The hypothetical results for the 50K Portfolio was -$982.50
The difference between the day trade trend and the overnight trend continues to be one of the most interesting divergences to me in the current market. The Nasdaq 100 has more than 100% of its gains in the overnight session. The only other time this has happened when the market is up more than 10% on the year and all the gains were at night was 2007. Has the market been "propped up" all year at night?
The Russell 2000 has lost more than half of its peak gains on the year.
Back up the truck Tom Lee!