The move in the Russell 2000 was simply straight up the last four days.
The hypothetical trading system signals for the One Million MNS 130 were +$4,311.25 with the 250K hypothetical results = +$862.25. The hypothetical results for the Stock Index Portfolio 18 was -$1,225. The Stock Index Portfolio was up on the metals trades by +$3,065 in Asia Gold and Gap Continuation Gold but the loses on the day in the stock indexes made the portfolio a net negative on the day.
The hypothetical drawdown is about 12K in the One Million MNS 130. The markets continue to remain extremely calm and somewhat complacent. My fear is that the whole world is as complacent as the secret service since nothing bad has happened in a while. The VIX has creeped up almost a full point from Friday's low. Low VIX readings represent the limited need for protection in hedging portfolios.
We have seen a massive surge in the Russell 2000. Last week's "sell on the news" inflation data was more of a sell big cap tech and buy growth stocks. The market believes the inflation data will cause the Fed to cut rates soon. Lower rates make it easier on companies in the Russell 2000 that have lower profit margins.
The Russell 2000 has not really made any gains the last few years. Will we see the Nasdaq 100 move sideways while the Russell 2000 "catches up"?
I have been testing many of the E-mini S&P and Nasdaq strategies on the Russell and Dow the last two days. They show positive signals recently but not as much historically. Those markets have had more "noise" historically. The trend in the Russell 2000 and Dow futures is certainly notable. We will continue to research those markets and put together some strategies to capture persistent moves in those markets.
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