There was a massive rally starting in the last 15 minutes of the day session on Friday that continued in the overnight session last night based on plans for the US to have a Crypto Reserve. Crypto and Stock Indexes can be very correlated. The market continues to look to the Fed or President for stimulus, hovering over breaking news to generate dip buying. The mindset from 2020 continues even as the market pulls back. The big gap up generated an upside bias. The markets rolled over, giving back gains.
Chop II NEWS, and Chop NEWS NQ were the "dogs of the day", continuing to buy dips as the market dropped. There was some big ranges in the stock indexes. It was interesting to see a Key Reversal pattern on a Monday, which is a pattern we have highlighted on Fridays. We have had quite a bit of steady selling in the market in 2025 without very bearish market internals. The gap up and bullish market internals early, "threw off" Chop II NEWS and Chop NEWS NQ to generate losses in most portfolios. The NYSE TICK did hit -1300 level at the beginning of the last hour of the day session.
V-Reversal was one of the highlights and captured a nice short and continues to be a consistent performer.
The One Million MNS traded Sibilance NQ with 5 micros per signal up to 8 signals and live trading was down about -0.5% on the day while the 250K Portfolio was down -$1250. We have entered into the current Sibilance NQ setup with 27 strategies near a worse case three-year drawdown and wanted to start at this level to give us an opportunity to catch a bounce. We may re-order some of the existing strategies with the Chop II NEWS and Chop NEWS taking too many trades on a day like today. In this higher VIX environment, we prefer strategies that take less trades (1-3 per day max per strategy) and target larger moves on the long and short side. We want a balanced long/short approach.
Chop II NEWS and Chop NEWS have been on target for awhile with the persistent dip buying. While the market still has some steady dip buying, the pullbacks have been steeper and more consistent recently. We are seeing the bears gain momentum especially during the day session.
The crypto strategies, especially V-Reversal BTC did well since it held a long signal over the weekend. V-Reversal was up about 12.9K today hypothetical results trading 10 Micro Bitcoin. I am not trading this strategy right now and if I were, I would not have held it over the weekend which would have been necessary. BTCUSD could be traded with this strategy for weekend trades to manage risk for long trades, which short Bitcoin futures trades could be hedged with a stop loss in the cash BTCUSD when holding trades over the weekend in the futures.
The hypothetical results for the Stock Index Portfolio 10 were -$10,470 per E-mini and 1/10th per Micro. The net loss came from Chop II NEWS NQ. This portfolio is near a worse case drawdown with the performance from Chop II NEWS NQ. Chop II NEWS NQ will not trade tomorrow based on the existing rules.
The hypothetical results for Top 50 Select was -$15,302.50 while the NQ strategies were -$19,515. The Chop II NEWS NQ and Chop II NEWS were the biggest setback and went "rogue" on us.
The 50K Portfolio hypothetical results were -$21,180 while the NQ strategies were -$19,225. Chop II NEWS and Chop NEWS NQ really set us back in this portfolio as well.
The hypothetical results for the Two System NQ Portfolio was +$1,975 with V-Reversal NQ short being the only trade.
The hypothetical results for the Five System NQ Portfolio was -$8,215 with the Chop II NEWS being the setback in this portfolio as well. This portfolio is right at a worse case drawdown and a good point to hold for a bounce. Chop II NEWS NQ is not setup to trade tomorrow based on existing rules.
The Chop II NEWS NQ and Chop NEWS NQ were a big setback in the portfolios. These two strategies took too many trades in this type of market. They will not trade tomorrow based on the market conditions and existing rules. There will be revisions to these and/or replacements for the portfolio.
The market remains dicey as we continue to work on synching up with the right combination. This market environment is suited more for home run strategies that take 1-3 trades per day to capture a trend, momentum breakout, or reversal. The Open Range strategy below was developed in December and went through an initiation drawdown before some really big wins recently on the short side. It's a new strategy that I have been watching but haven't traded. It uses a 50 point stop loss and looks for a big move starting at the beginning of the day. I wouldn't trade it here at equity peaks but it may be added to some of the portfolios after a few losses. We want more balance with long/shorts and this has captured the short side well recently.
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