The systemwide oversold cycle began on 3/2/18 and will last for 10 trading days. Thus far, the return on the SPY has been nothing short of stellar, +3.75%. Gains in some of the upside ETFs even more spectacular — with SOXL +41 points during the same time period.
Just to put some perspective on this, the current return is about double the median return for our principle algorithm. In other words, if you were basing your investments on standard deviation, you’d be a net seller today — moving swiftly to cash. Markets look great and my call to hedge was flat wrong. However, that doesn’t mean you should be greedy and hold over the weekend. Who knows what could happen? Maybe Agent Mueller will kick in Trump’s office door and arrest him on charges of treason.
Here are the stats. Bear in mind, we’re only in day 6, so, comparatively, the SPY return is nearly 4x greater than the expected return and twice as much as the entire 10 day cycle, historically.
As an aside, my Bubble Basket is +22% this year. That’s a collection of the most overvalued stocks in the market. Talk about risk on, eh? My quant is +1.55% for the day, saving me from committing suicide having to look at this fucking SQQQ all day long.
Off to take a siesta.
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Mueller won’t do shit if Lord Blankfein ( God himself willing ) becomes Trump’s next senior economic advisor.