코인톡

Going into the weekend, I sold a significant amount from my portfolio. I'm now, for the most part, back in cash, probably 15% invested.

Why have I done this?

Feedback from the market.

I would say out of my last 10 buys, 10 of them have either gone negative on me straight away or given me some green on the screen for a day, then reversed.

Most of these buys have been paper cuts, which we can deal with, but over time, those paper cuts start messing with your psychology. When the next trade presents itself, you start doubting whether you should make the trade. This isn't a good place to be. So, I've decided to take a step back again.

If I look across all markets and cross assets. Here is my take.

$SPX / SPY
A retest of the 50DEMA this quickly isn't healthy from the last test a few days ago. My expectation was that if the bulls were going to step up, they should have done so to defend it the first time with more gusto.

The best trading conditions are above the 20 and 10DEMA. We aren't there.

We had good news of the war ending, gapped up, couldn't hold. This is an expectation breaker. Good news should be good news. When it's not, it's priced in until proven otherwise.

We have increased volatility on the index, currently running at 1.3% ATR, with a VIX hovering around 20/21. This is masking the true volatility of individual names that have been market leaders. Some gapping up 15% one day, then gapping down 18% the next, this isn't healthy. I'll go to the casino if I want to gamble. There are still major risks in my view of huge unwinds of leverage in the system that can spill quickly to all areas.

$DXY
Breaking out of a 1-year sideways consolidation. This is bad for risk assets generally. I am still watching it for a reversal into the month-end. For now, this has killed all the metal trades.

$XJO & Equal weights
In general its terrible. Has been for a while. Tax loss selling is likely nearly finished, but we are still in an extremely vulnerable position here. 10yr Bond yields are dropping (now below the 200DEMA); I don't actually think interest rates will go higher from here, and still, the market can't find its feet. Negative. I want the wind at my back, not in my face.

US Yields
Have come off the tops and are trending down nicely, yet "risk on" names are not trading in parallel with them, growth ETFs ($VUG) are coming down, and value ETFs ($VTV) are going higher. $BTC, another risk on proxy, is on life support. Just seems very odd to me.

$OIL
Has been smashed, reducing inflation risk - should be positive for markets.... Still not the case, really.

$MAGS
The biggest weightings in the markets are all trading below the 200DEMA - this is a serious drag.

$KOSPI
Is trading like a yo-yo daily, with circuit breakers stopping trading every 5 minutes.

Midterms
I am expecting weakness into them, and it's not far away now.

Bottom line - Next week, we could go higher, lower, or sideways. I have no idea. But the risks to me right now seem pretty clear. All front foot buys (breakouts) for me aren't working, all backfoot buys into MA's aren't working; they are falling away. So, what's the point?

If we don't take messages from our portfolios, we have no hope in this game. Right now, my portfolio says take some time. I'm aware it may well be me as a trader thats not executing at the top of my game. If you are making good progress in this market, kudos to you.

One more thing - A friend that I told to go to cash at the last cycle top took my advice and then didn't take my advice to get back in on the exact low (because a war) has now sent me a text message, saying "The war has ended, am I putting my super back in?" This matches the current AAII, more bulls than bears. We like to climb walls of worry, not certainty.

TOP SIGNAL ??? TBC

NFA - On Monday, I could be 300% long again. Have a good weekend. It's coming home ⚽️