Danger of Quad 0 looming!

Mid-week update.

Quad 0 Danger looming:

What means Quad 0?

It means either almost everything is strong or almost nothing is strong (correlations breaking down!).

That is the case mid-week right now (nothing is strong). If this goes on until Friday after close all bullish bets are off.

So far, Quad 2-3 is hanging in there:

Quad 3 ETF Exposures $OIH, $USO, $UUP, $RWM, $URA have a constructive pullback:

Quad 2 Exposures with no lower low: $OIH, $USO, $UUP, $URA, $XLK, $QQQ, $XHB, $XLI, $BRKB [the following book was the target allocation on last Friday!]:

But again, if Quad 0 does appear on this Friday at the close, my trade would be the Quad 2 book with a 50% short on the Russel 2000 (expressed via a 25% TWM position on the Quad 2 Book) —>

The pain is in Quad 4 exposures $XLP, $TLT, $GLD, $XLU (ouch!!!), $UUP, $RWM

For my small cap value momentum book (I am hedged since the Quad 3 call) this would be no change, so nothing to do here!

I am holding my horses here; this can turn around until Friday after close. Week by week! I will update on Friday about 2-3 hours before the close.

All the best and best regards.

Andreas

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