PROBING

I took one risky trade and booked it for +4.8%. I now have a handful of positions, all bigger capped near session highs, designed for low beta returns. I am hedged via 10% position in TZA, which I feel is a good overnight hold. The dichotomy here is record highs for FANGT and everything else falling by the wayside.

The trade is to be long mega caps and short small. There are days when this trade fails, but on the whole, this is a winning trade.

To buy commodity plays or not on this dip?

No.

I just don’t care much about it and prefer to buy strength than dips. I know the bigger money is in catching the turn. But generally speaking, I am more comfortable buying what is in play — because my trading account is designed for short term.

Aside from the rip roaring days, I have found comfort in selling everything at the open, which usually consists of bigger cap stocks that were closing near highs and a triple inverse ETF, sometimes as high as 15% weight. If market opens up, I close out the longs first and ETF last, since we usually fade opens. If we open down, I close out short and then longs. Into the close, I have been choosing 1 runner for AHs session and haven’t lost yet. The criteria is simple: buy a nut stock near session highs trading on very high volume. In Stocklabs we can measure the delta of volume and that helps a lot. You want to buy names with big volume breakouts.

After I sell the open, during the afternoon I probe with small size and usually harvest gains/losses in small quantities. I rarely buy more than 50% weight overall. Lastly, into the close, during the final 30 mins, I position for tomorrow.

Rinse and repeat.

Up 95bps for session, +9.3% for October.

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