Strong second day
Wait for pullback to see (more) relative strength!
We had a second strong day.
There is strong momentum on 1 day, 1 week and 4 week for long only systems.
Even high beta put in a small (!!!) relative strength pattern, what we need to see here is a second higher low with relative strength compared to the market:
See high beta relative strength (all over the place in 2021!) setups here —>
Relative strength setups of small cap value momentum (not marking the chart, can you see them?) —>
Too early to get rid of the hedge.
But, if we pull back from here and high beta still shows relative strength, we might get a long only setup. THAT happens very often in the beginning of Feb. / March (same in September!) and can last until mid May.
Also watching TLT, if that gets a bid, we might see a much more strength from Tech stocks…
So far inflation stays high (good for small cap value momentum) —>
Runners start to appear, IRNT (= TECH) —>
I start to see some strength, let’s wait and see!
Still + 1% YTD. The hedge is still on.
Have a great weekend!
Hi Andreas, I'm also trying to define good times to be in the market with my P123 small-cap strategies and when to be out. If you have TC2000, did you ever take a look at their NYSE McClellan oscillator (T2106)? It seems to correlate pretty well with the time periods that I will have a drawdown. Basically above the 0-line is good, below is bad.