Micro Quad2, but I am waiting for breadth confirmation here and I stay hedged!
I hate to post it, but we have a Micro Quad 2!
My unhedged small cap value momentum book is at an all-time high while the indices are still in a drawdown (which is bullish).
Still, I am not ready to lift my hedges here, I will wait until we get a confirmation by breadth!
I will stay nimble, and here are the reasons:
The dollar is monster strong —>
Interest Rates are strong —>
The 4 Week relative strength line of the QQQs is sloping down + RSI (measures the velocity of the up and down moves) is weak + we have a lower low on the QQQs (compare with the situation at the beginning of this year, all vice versa!) —>
This tape is somehow hard to read for me, so when in doubt I stay hedged:
If we turn up here, breadth will confirm, and I will have enough time to lift the hedge for my small cap value momentum strategy book.
If you have to be long (legally) my best bet is BRKB.
CANSLIM traders should wait for breadth confirmation too (get the watchlist ready in case!), most CANSLIM traders are in cash for weeks (actually one week before I called the Quad 3!)
The long XLE / short IWM since the quad 3 call is going well, but I have no high conviction here!
No touch:
ARKK names, this market wants to see good fundamentals
Bonds (still not bullish trend)
GLD (but close to turn bullish trend)
Bitcoin
Sorry again, but that is the case sometimes: the tape is not always easy to read, not always are all stars aligned.
All the best and best regards
Andreas
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