What a wild weak!
From a short-term perspective, I would have rather seen the market not break out of that range and instead push back lower and through the 2040 level. From a long-term perspective, I’m glad to see this 2134 break and new all-time highs finally get established.
The follow through to the upside was quite impressive this past week. I came into the week thinking there was a strong chance that the bulls would cave. But for the first time in 15 attempts, they did not.
Instead it broke out and kept running. We made the right decision to cover our shorts early on, and start adding new longs aggressively. Right now, I think we are in a good rhythm. The market is likely due for some profit taking and if it does that here, we are light on our positions so that it won’t impact us a great deal.
Right now we are 20% long, we had as much as 50% long as various points last week, and we can add more on any weakness. I may even try to play the short side a few times as well if the weakness persists like we saw on Friday. All-in-all, I expect to keep a bullish bias on the market.
Another positive aspect of the week’s trades were the higher returns while keeping the losing trades small. This was seen most in the CNI and NFLX. I’d like the sustained rally to provide more opportunities at trades in the 5-10% range as well. This wasn’t the case in June and ultimately required us to make a hefty amount of trades throughout the month.
Overall, I like the direction this market is wanting to take and plan on capitalizing on it as much as humanly possible.
