Quad 2!

O.k. the Quads changed; we have a Quad 2!

The last hedge (Short IWM) trade is under water (about 1.5%, after being in the green almost 5%, that hurts!).

Same with the hedge on QQQ (about 1.7% under water):

And we got a monster breadth thrust:

What did I learn this week.

First of all I will be more aware of options positioning, the GEX was clearly in bounce territory:

+ the SVIX put in a ton of relative Strength and we had a bull dip on breadth with a fast crosover of the 20 and 50 ma intraday on the hourly:

At that moment the Quads had not turned bullish, but at these extremes I should have at least lightened up the hedges or put on a long SVIX Trade (that was the plan I had in my head, do not ask me why I did not execute [well, the answer is my bias was too bearish!].

Yep, stuff happens and I am looking pretty stupid here!

But the Quads are now bullish, Quad 2 is the call, the system is the system, I just rebalanced my portfolio, long 105%, all shorts are lifted!

Strong opinion loosely held for a week is the name of the game.

Strategies:

• I give my ETF Portfolio one more week in cash, if we are lucky, we get a small pullback and Quad 2 holds, then I am loading it up.

• Small cap value momentum with an earnings tilt: long only, unhedged [System book picked a wide range of stocks from software to energy stuff, so well diversified, good in Quad 2!]

• CANSLIM —> Best CANSLIM traders in my network built pilot positions this week and looking for setups here; I agree!

• Shorting: wait for Quad 3-4; my best shorting systems (fresh out of the laboratory) look pretty stretched too —>

  

• TLT: was bullish trend last week, this week it is a close call. Since we are not in Quad 3-4, I am not longing it.

Let’s see if this Quad 1-2 holds here and we get a decent trend. As I have written the tape can change week by week, but it also shows longer stretched trends.

All right, have a great weekend (puuuhhh, what a week!).

All the best and best regards.

Andreas

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