Second half of the year: Melt up in small caps!

Just a quick update.

My view is that markets will be difficult until mid-year so I stay hedged.

I am waiting for a drawdown of 10-15% on this system book (which is not hedged) and then go for it.

Reasoning:

I do not believe in a 2008 or 2020 here, US economy is strong, recession will be shallow!

Value small caps are as cheap as in 2000 and they behave exactly the same like from 2000-2003, yes, they are volatile right now, but the trend is up!

I improved my systems a lot (see above), combining a traditional small cap value momentum system with a quality tilt (free cash flow / assets total) plus systems that can be titled as EPS breakout systems on small caps.

The book has the following systems:

Breakout (the last 2 from above) systems are fast in cash; therefore, the risk of the overall book is pretty low.

Short term I am bearish, target of the SPY around 380, if we are lucky, we see the lows again. But if that happens it will be a great buying opportunity!

Staying hedged for now.

Timing will be T2108 on TC2000, as soon that one is below 15 and the system has a drawdown around 10 % I will lift my hedge and go all in.

Do not despair, the second half of the year is going to be great.

Give https://twitter.com/BenzStanzie a follow for short term timing of the market. Follow him for some weeks and you know what I mean!

Best Regards

Andreas

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