Wow, that escalated fast... Quad 4

Last Thursday I wrote:

_______________________________

“Staying hedged! Dog fight between Quad 1 and Quad 4

The danger of a market like this [meaning Tech not leading based on relative strength], tech can always drag down the market at any point like it did in July / August. And the low volatility trade is long in the tooth. So, I am staying hedged.”

_______________________________

Well, we got a clear Quad 4 after today’s action:

Most notable VIXY, GEX, QQQ, SMH —>

VIXY: is holding an 8-week base, seldom and therefore significantly bearish!

[Red line: relative strength, yellow line 5MA of relative strength]

We have 2 lower highs on the GEX + the buy zone is pretty far away:

QQQ: relative strength is weak + 5th distribution day today. Since the sell off started in July, there were only 3 up days with higher volume. Tech gets sold hard here; distribution is all over the place.

SMH:

I reduced to a 50% net long position (was 60% long).

I know, that XLU, XLP and XLF + the low volatility trade is holding up well.

But quite frankly I do not care, because there is danger that those exposures will be dragged down with tech.

All the best and best regards.

Andreas

The information on from Andreas Himmelreich / QuantStrike and this video / blog is for information and discussion purposes only. It does not constitute a recommendation to purchase or sell any financial instruments or other products. Investment decisions should not be made with this video / blog, and one should consider the investment objectives or financial situation of any person or institution.

Investors should obtain advice based on their own individual circumstances from their own tax, financial, legal and other advisers about the risks and merits of any transaction before making an investment decision, and only make such decisions based on the investor’s own objectives, experience, and resources.

The information from Andreas Himmelreich / QuantStrike and this video / blog is based on generally available and paid information and, although obtained from sources believed to be reliable, its accuracy and completeness cannot be assured, and such information may be incomplete or condensed. All performance results are hypothetical and the result of back testing only. Out-of-sample performance may be different. No claim is made about future performance.

Investments in financial instruments or other products carry significant risk, including the possible total loss of the principal amount invested. Andreas Himmelreich / QuantStrike and this video / blog do not purport to identify all the risks or material considerations which may be associated with entering any transaction. Andreas Himmelreich / QuantStrike and this video / blog accepts no liability for any loss (whether direct, indirect or consequential) that may arise from any use of the information contained in or derived from Andreas Himmelreich / QuantStrike and this video / blog.