Last Halloween was a Trick. This Year a Treat?

Friday 25th October - Daily Update

Is that it?

Is it a little red blip like January, or a precursor blip like April?

Daily

As always, balance is required.

“Chris, the 20-day SoS is at a maximum!”

Yes, it is. It “always” portends a drop in the SPY—except when it doesn’t!

That is why we do not rely on just one Strength of Signal input; we have many.

Has anyone got their Halloween decorations out? Preparing kids’ or your own costumes? Planning parties?

Now, be honest. Let’s think back to last year and all the thoughtful but ultimately useless tweets, posts, and blogs about:

• Credit

• Commercial Real Estate

• Ukraine

• Israel

• Recession

• Breadth

• Small Company Earnings

• Incorrect Jobs Numbers

Could this be the end of it all?

Maybe.

Did we dip below momentum yesterday?

Yes.

Is the volatility measure still signalling caution?

Yes.

None of these factors alone are always accurate. That is why we have multiple measures and combine them.

Just measure what is actually happening.

All of the “bullish forever growth” stories you are reading today will probably end up in a post like this one in 6-12-18 months.

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Most Recent Portfolio Rerank

Navigating the Market: Rebounds, Rotations, and Untapped Moves

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Over the 10 months this experiment has been running, our closed returns are 26.1%. That is a return extracted from the market through capturing gains. This is very different from simply buying and holding SPY, which over the same period shows 29.7% of open returns. That “on paper” larger gain still belongs to the market until you close it.

• Current Open Equity: 31.2%

• Stop Loss Trigger: 27.2%

• Current Closed Equity Return: 26.1%

Obviously, I don’t want it to happen (ish)… but should a meaningful pullback occur at some point in the future, that is where this system really shines. We have the ability to capture gains and move around to other pockets of strength, or simply wait out the storm in cash.

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