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Week of January 29, 2024 - Weekly Performance by Strategy



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Notes

  1. All 1 unit position sizes that were used for the results above are shown on the respective strategy performance pages on the strategy 'Trades' PDF.

  2. Clients trading more than 1 unit of risk per trade (2x, 3x, etc.) realized the performance published above correspondingly to that amplified magnitude.


Summary

Well, the FOMC, NFP and most of the big names reporting earnings has come and gone. Premiums heading into the week were jacked high, mostly for FOMC for what ended up being a washout event. While the substance of Powell's comments was moderately hawkish, it took the market a blatant statement that there would be no rate cuts in March to even see a somewhat decent selloff.


This was short-lived and contained to Wednesday into the close, as markets rallied nicely on Thursday and were up big on Friday. While earnings on META and AMZN led the way for Friday's launch, the jobs report before the open on Friday was indicative that rate cuts could be further pushed out, as the headline number beat by 2x, but more importantly Average Hourly Earnings (AHE) came in WAY HOTTER than expected. This signals inflation is not subsiding as much as hoped, but the market didn't care and rallied more anyway. More on our take on this in our 'Looking Ahead' below.


Options Grid waited for the storm to clear and we didn't get into a trade until Friday afternoon for next week's Wednesday expiration. There is a modest bullish skew on this trade and continued follow-thru to the upside will bode well for this trade. Let's see what price action does early next week.


Trade Sphere entered into the second week of auto trading. Again we were in limited exposure, mostly because of the premiums being so elevated early in the week and the quality of the signals was average at best. This turned out to be the right move, as burning a bunch of premium on directional moves would not have given much return. A very, very small loss on the week at less than $100 total across about 6 trades. Sometimes waiting for the best setups, especially early on with auto trade is the best move. Since we don't charge a set or monthly fee it costs our clients $0 to be patient.


Per the sample scaling schedule for this strategy we are shooting to have the clients that are currently auto trading at 1x to be in the position to scale to 2x within the next 90-120 days.


10x Project Similar setups to Trade Sphere and not too many trades on the week and also a very, very small net loss (also less than $100 total). On to next week.


While last year did not take off like a rocket, we are expecting to produce enough value that clients that a currently onboard at 1x scale to be at 5x scale or greater before the end of the year, per the sample scaling schedule and how the strategy is designed.


Futures Flex No exposure, no trades.

Looking Ahead

Very lean on the Econ calendar next week, with ISM on Monday just after the open being the only thing that could move the markets a bit, but it would likely be a minor and brief move. The market is back in price discovery mode. What Friday's price action, and that on Thursday for that matter tells us is that the market does not care if rate cuts are not coming soon. So basically 'bad news is good news, good news is good news' scenario in place.


If the economy is 'strong' and there is a bunch of liquidity on the sidelines, it will be put to work. We don't really do the whole 'bullish' or 'bearish' themed thing and solely focus on price action each day and week-over-week. In the long term, not having a bias one way or the other and mostly trading what IS, versus what might be will serve our clients well. This does not mean we won't position at times with a clear bias, but the mindset is ANYTHING can happen on any day or week and if you do this long enough it will happen. Both for and against your positioning.


Being devoid of emotion with trading and investing is one of the keys to longevity and success.


Here's to a good week ahead!










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