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Wednesday 10th April - Daily Equity Update

Sideways purgatory.

It has been frustrating at the portfolio level as it has whipped us around more than I would like.

Great question yesterday. So first everything is calculated individually so just because something happens at the index does not mean it should be assumed for everything. All the tickers travel their own path.

Old prices leaving a lookback window can be just as important as any new price set today. It defines your trading range your volatility and your volume profile.

The move from October was pretty well-telegraphed. What was more impressive was the move from January. A three-month lookback heading into December had all these bad prices which meant each incremental positive day was often replacing a negative day. This made strong momentum that much easier to achieve. Once Halloween left the lookback it was a constant string of positive days leaving the window making it harder to maintain momentum.

That explains the strength count. For levels we have moved up and to the right for 6 months so yes the levels now catch up to price. We have seen that in the flipping of individual positions. It puts us in a position where momentum and trend are closer to price and hence easier to break but it doesn’t make it a certainty that we will.

What people often call “oversold” can be achieved in 2 ways. First of course is a price dislocation “aah AAPL is down 10%”. Or in time “Wow the market has gone nowhere for a month”.

Hmm, I wonder which one we might be facing now?

Will we get a Santa rally every quarter?