Market thoughts and position update 7/8/17


It has been another busy week. And this short review will reveal my lack of time. There is a chance that the NDX has finished its decline and now will trade sideways, but I would not bet on it. I think we still need a puke-day. However, it must be said that with market rotations you are never given real climax-selling, just sideways action.

My medium-term algo still has me in the market. Although it may do some contract-switching from NDX exposure to SPX exposure this coming week. I will keep you updated.

Above you can see the SPX chart. Note how Gaap earnings are finally over $100 per share. Unemployment is drifting sideways. But the Fed rate is only 25 basis points from the 2 year rate. Inversions will signal a recession-scare within a year.

Note above that the total option ratio is signalling a sell on SPX. Green line is below the red.

As is the NDX also. Not enough for me to sell. But worrying.

Below is the Momentum models we follow.

We are currently long NDX, no hedges, naked as a newborn. Hoping the headwinds will turn. Luckily, the fund is up strongly this year. So the draw-down isn’t too painful. Oh, you wanted to sleep at night? Psshhh… white-belt…

Have a great weekend.



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