The stock indexes surged on lower CPI at 8:30 am EST. The indexes made their highs of the session on CPI with very little follow through and the bounce was pretty weak considering the sell-off. It was only the third time since February 18 that the Nasdaq futures were able to trade higher than the previous sessions high. I'm conditioned to see the markets bounce more and thought we would have seen a stronger bounce the last couple of days. Tomorrow is PPI in the pre-market.
If markets were to make a limit move lower or open limit down, I will pause trading on my side.
The downtrend is steady and is justified. When there is a Fed Put or Presidential Put in place based on fiscal or monetary policy, you ask the question, "What can make the market go down?" When there is no Fed Put or Presidential Put in place, you ask the question, "What will make the market go up?" Since 2009, the market has mostly had either a Fed or Presidential Put in place. Stimulus through debt and money printing can "catch up" and there is a limit.
With massive fiscal and monetary stimulus seemingly on pause for now, the transition to old fashioned corporate earnings growth will probably be bumpy and many of the bullish market patterns since 2009, could change. Many stock markets stats are similar to this, "since 2009, whenever the market trades below the 200-day moving average, it is up from those levels within 12 months". Applying the same longer term bullish market statistics can be challenging when the fundamentals change.
The One Million MNS was up about +0.04% on the day or $100 in the 250K Portfolio with some Sibilance NQ signals.
The hypothetical signals for the Stock Index Portfolio 10 was +$45 on the day per E-mini and 1/10th per Micro. This is around breakeven.
The hypothetical signals for the 50K Portfolio was +$5,205 with the top portfolio of the day.
The hypothetical signals for NQ Stock Index Portfolio 2 was +$2,935 on the day with V-Reversal NQ hitting two short trades. The second trade was about 4 points away from hitting a profit target before it bounced but then finally moved lower, below the entry signal into the close for the short trade and exited at the end of the trading day. You can see the adverse excursions on the trades in the image below.
The hypothetical signals for NQ Stock Index Portfolio 5 was +$1,910. We are tracking this portfolio with Open Range NQ today. V-Reversal took the same trades as the NQ Stock Index Portfolio 2 along with an NQ Open Range trade that was a 50 point loser. This was the same strategy that called a 445 point winner this past Monday.
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