Pullback is fine so far!

The pullback is fine so far.

Small cap value momentum systems hold up well.

They (small cap value momentum systems) need to make a convincing new high while indexes are still in a drawdown. That would be an all-clear signal.

Industry wise cycs are leading and showing strength.

This market will be all about interest rates. Right now the market shows good relative strength in relation to the fact that interest rates rallied.

Also sentiment turned very hard to the negative side, my best guess is, that there are 9:1 bears to bulls on my fintwit follows.

I am 110% long now. Stop loss for reducing longs and putting on a hedge would be a weak new high (not stronger than the Russel 2000) or a new lower low on the small cap value momentum systems.

Remember: I live in Europe and my account is in dollar, so I am always long the dollar, that is a permanent hedge and that is the reason why I can be that agressive now (dollar will work partly as a hedge).

Also it depends on your strategy. Breakout strategies based on growth stocks struggle. Value Momentum > Growth momentum right now.

60% of my portfolio holdings look like this, so there is no reason for me to back down (yet! the tape will determine that!).

Let’s see…

Best Regards

Andreas

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