TL;DR 
Short RSP vs Long MAGS ? 

No change really...

Here we go with the trade what sort of person are you? A QQQy type person where trends last until they don’t, or an IWMy type person where moves have a lifecycle and often mean revert?

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If you are reading this then you probably subscribe to the big finance substacks and likely have a few of the big podcasts on a weekly rotation too…

How many of them were discussing a new all time closing high for QQQ on Tuesday?

I bet you heard a lot about bonds and Trump and the blah blah…

Did it help your account?

The dot is Green

Trend is 750.41

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

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TL;DR 
Short RSP vs Long MAGS ? 
🚰 Utilities and 🏠 Real Estate On the rebound ?

No change really...

Perhaps I was little early with the bouncy bouncy talk, but another week has passed and even more things are “oversold”…

Lots of sectors but the standout is Utilities.

Following on from last week. Would everyone be ready for the MAG{insert_number_here} to lead again?

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Get a life if you think I have any idea about that nonsense, but thanks for clicking the bait.

The dot is Yellow

Trend is 750.24

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

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TL;DR 
Short RSP vs Long MAGS ?
🚰 Utilities and 🏠 Real Estate On the rebound?

Utilities and real estate attempting a rebound on momentum? That could be a little early. Remember in the past I have used QQQy and IWMy as a way to describe things likely to trend (QQQy) and likely to mean revert (IWMy). As you can see below ~35% of both sectors are triggering a T4 mean reversion trigger. This could be something to watch perhaps not in the next 1-2 weeks but moving forward, there are not many people that would play long bonds or bond proxies at the minute.

It could continue into OpEx but “the crash” is already happening. If you are a paid subscriber and are able to access the included spreadsheets you can see large swaths of all sectors are already down 10-15-20% over the month.

What if the crash is already happening and all we really have is the setup for hedge funds to chase and re-leverage?

Is the pain trade now a very concentrated rally into the end of the year?

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I post this chart every week. If you are new here it is probably a nonsense.

This is a chart of pressure. It uses price, volume, volatility and gamma to create regimes.

The longest of which are the 2 year volatility cycles. The others are smaller but self similar i.e. they look like the 2 year cycle but smaller.

It’s not rocket science nature came up with amazing things and reused them in tiny capillaries in a leaf all the way up to the largest tallest trees.

The price doesn’t matter it is where we are in these regimes.

Currently we are at the end of the 2 year cycle.

The bands are tight meaning 3% moves “feel” like 7-8% moves of a year ago.

The easy money has gone. Now there could be rises prices ahead but just as much right now is keeping as much as you can because in 3-6 months maybe you will be having a much harder decision of buying when the SPX is down 20-30% not 3%.

The dot is Green

Trend is 751.94

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

KeepItSimpleSubstack

Hot Takes with Hank

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TL;DR 
Macro bros in knots as Mag ⓻ start to lead?
🚰 Utilities to start a rebound?

Energy leading on bullish momentum measures but paid subs will be able to see in the linked spreadsheets that it is not an equal distribution.

Industrials feeling the pain but is this a mean reversion play?

Mag 7 is no longer a correlated blob. There is much to say that to replicate the SP500 you only need to use the top ten names in the index. Will we see a taper again to single names defining index moves?

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A little cross over chart here from the portfolio post that goes out separately each week from this index post.

Trigger 4 (T4) is a mean reversion trigger where a combination of timeframes momentum values have gone negative.

This is a mean reversion signal i.e. bouncy bouncy. Now depending on the stock and the regime impacts how high and how long.

I will go through it all with the important but too highly paid people who decided to give some of their $$$ to me…

The dot is Green

Trend is 751.90

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

KeepItSimpleSubstack

Hot Takes with Hank

Think pieces!

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I would like to think for a finance muggle with a laptop I have been pretty accurate on gold.

If I may be so bold as to highlight this note I sent out 7 days ago…

Well 7days and 7% hits kinda nice.

Now here is the hard part. I have not been long gold in the run as I should have been since ~ 4th August as my system says to be…

I have been taking a step back and focusing on the day job.

That’s what makes this post awkward. I would have been long and feeling pretty good about myself, but now staring at this retracement and through gritted teeth saying “its not broke trend yet”.

So it was this sexy chart that prompted the note for people to be cautious. What made this one different from all those yellow arrows is the run up wasn’t being driven by options.

Remember that on that run higher into the start of this year realised volatility was increasing which meant as the price was rising the more “European” style trend followers would have been reducing their position sizes in line with increasing volatility.

Eventually all the fancy vol traders that bought cheap deep OTM calls 3-4 years prior on gold the gamma was exhausted. The sheep had all piled in. The CTAs were selling on the way up, and the day traders had other shiny’s.

Where are we now?

In terms of the recent move this momentum thrust has been strong but over the short term it is kinda given all it can give.

If we look at a longer timeframe version of our normal detrended chart a similar timeframe to my self congratulatory chart..

The recent move has been somewhat of a wimper. In fact it looks a lot like 2021.

If that move were to be repeated it would put us somewhere in the middle of June 2021.

Using that analogue we could see $4000 using GC or £366 on GLD.

Our wiggly lines have bottomed and started turning up we could see these levels as we move forward in time but “prices may vary”.

Who knows?

I certainly don’t. All this is just a guide to help us be a bit less wrong.

TL;DR 
Rotations have been rotating.
Tech on the rebound?

A real mixed bag Energy, Comms and Healthcare out in front with possible rotations coming with Tech and Utilities.

This is the part that catches most people off guard..

“look there’s so much weakness in the market, the index cannot hold on”

Or you can flip it on its head...

“There have been pockets of weakness, but they appear not to be able to bring the market down”

So perhaps the redirected question should be..

“what if the pockets of weakness simply become less weak?”

and

“what if tech which always goes up stops going down?”

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I love terrible charts, I think I am only able to make terrible charts because I hate 🐂💩

So many of the Fintwit chart porn examples the reason why they go viral is because they are simple. Why do we think a simple chart would explain the most complex human system on the planet?

Anyway this is my 💩 chart this shows the Strength of Signal (SoS) measure that goes into my calculations. I have highlighted the points here where the different indexes diverge. I will go over it for paid subscribers, but the gist here is the seasonals support a rally.

The dot is Green

Trend is 751.79

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

KeepItSimpleSubstack

Hot Takes with Hank

Think pieces!

Read more

Long run perspective.

If it’s green don’t overthink things!

Zoom in our cross over point is orange, that means we’ve broken trend. So there have been some flip flopping over the last few months.

This shows how we calculate the levels that matter for the system to function.

What does it all mean?

The dot is Green

Trend is 751.58

SPY spends 82% of all trading days above this level.

KeepItSimpleSPYman

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

KeepItSimpleSubstack

Hot Takes with Hank

Think pieces!

Third quarter has the smallest amount of variation…

Gamma is positive.

Will VIXperation mark a turning point?

If you like all the wiggly wiggles then here are the levels.

The wiggles are fine.

For a simpler life If we just hold above trend and go flat below trend we can achieve this with the past.

How likely is it to manifest into the future?

Who knows?

I certainly don’t. It sure does help my sanity though to have a couple of numbers to watch out for instead of trying to pick my way through the split personality of “the noos”.

TL;DR 
Stuff is bullish.
Things are bearish.
More stuff and less things.

Risk on vs risk off.

Utilities and real estate, bond proxies if you will, are falling. While energy etc is rising.

Internal to that “bond proxy” sector the high beta names within it are doing well. Will it continue?

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TL;DR 
288 longs and all the "too far too fast" brigade are back out in force!

What a difference a week makes.

Did you know in another crazy week we went down 0% and up 3%.

Whodathunkit?

Meta went OK still not above trend, but a lot of its communications brothers and sisters certainly had a good week.

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Scan you remember last week when we had all the super intellectual reasons of why the market was down. Now we have all the 4D chess reasons for why the market is up.

Has anyone watched Moon Knight? It’s the story of a chap with split personalities that is the avatar of an Egyptian god. The Egypt part isn’t important but mores the split personality part.

We will continue to attach these stories to things because our brain seeks order.

I wonder if the real bubble, if we are living through one, is in financial narrative. Constantly flipping from one story to the next to try to explain the unexplainable.

The dot is Green

Trend is 747.20

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

KeepItSimpleSubstack

Hot Takes with Hank

Think pieces!

Third quarter has the smallest amount of variation…

Gamma is positive.

Heading into the strongest part of the month for flows..

Feels like deja vu and the compulsion is to feel like a fraud just posting the same thing.

I have come to realise it is the opposite. It is a superpower. The ability to review the same dataset continuously trying as much as possible not to inject any bias.

Just the facts when it comes to what has happened in the past and the humility to understand we can only try and map an approximation of that past on the future.

Just like a media that was trained to view the world as it was in the past but no matter how different it really is they can only use the same flip flop stories to explain it.

If you like all the wiggly wiggles then here are the levels.

The wiggles are fine.

For a simpler life If we just hold above trend and go flat below trend we can achieve this with the past.

How likely is it to manifest into the future?

Who knows?

I certainly don’t. It sure does help my sanity though to have a couple of numbers to watch out for instead of trying to pick my way through the split personality of “the noos”.

TL;DR 
231 longs in a crashing market!!

Mag 7 on its Jekyll & Hyde trip..

Value, you go grrl!

Wowser in a “crazy week” you know where we went down 1% and then up 1%. Safe Utilities got the biggest nut punch.

“Hello Meta my old friend” green on the walk forward and both mean reversion triggers (T3 & T4) do we have a possible options trade brewing?

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Think pieces!

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So last week’s title was “No Drama..” be honest did you freak out?

This is a safe space…

The SPY at its lowest this week compared to Friday close was -1.29% and closed +1.09%.

It’s OK we are in the second year of the cycle, where vol bands have compressed and emotions run high.

Down 2s this year feel like down 5s last year.

Our silly monkey brains!

The dot is yellow.

Trend is 732.30

SPY spends 82% of all trading days above this level.

Its all cool beans.

It is all the same chart so I can use all the same data. In the last 1761 trading days SPY has been above “trend” i.e. in green or yellow 82% of days.

We could probably include orange as the distribution is very similar, but we need a transition point.

In 1761 trading days price has never moved directly from Green into Red/Black there is always an intermezzo hangout in Orange.

KeepItSimpleSubstack

Hot Takes with Hank

Think pieces!

Read more