Strength!
Pain Trade is up, but the short stays on!
Seeing strength!
Shorting Systems are not outperforming, long systems are outperforming based on the last 13 Weeks.
Micro Cap, Small Cap value momentum outperforming (nothing changed!)
Mid to big cap high beta, putting in a mini relative strength setup (but not really convincing!)
Same with growth compounders:
High beta trash:
At the same time high beta trash had two very weak days (I shorted RIVN and SNOW and they tanked hard, out of them both for a 14% and 25% win).
So the theme is still that high beta trash is very crowded and does not participate in the up moves (so far!). And value still ouperformes growth. ARKK behaves a 100% like the Nasdaq 100 from 2000-2003.
The key is now not to loose our head here. We make money beeing long small cap value momentum and beeing short at the same time. It is a difficult market and it is simply not the time to be a long only hero here.
The difference of my long only book to the long and short book is:
Long and short —>
Long only (see that 50% drawdown in 2008, that is tail risk!)
Key for me is to stay in the game even I have to give up performance because of the short. The low volatility of my port lets me think straight, its enough to live of it and it lets me trade a bit on the side, so I learn.
Let the rally prove it self from here. I want to see, that the big cap growth compounders get stronger.
If we get something like 2000-2003 we are lucky and the short will cost me nothing from here because the Russel 2000 was basically flat during that time:
The similarities to 2000 are stagering.
If not we wait for better times, clearer signals and lift the hedge all together.
But not yet!