Exit Long NASDAQ ($NQ_F) 6/26 +$855.00 per contract
The NASDAQ finally triggered its exit signal for a small profit, a week after the S&P did the same. It looks to have fallen even further overnight so it could be an interesting end to the week tomorrow.
There’s no question this is not the uniform sell-off or correction people are making it out to be. I highlighted earlier tonight on twitter it’s extraordinary to see so many traditional momentum names like $FB, $NFLX, $TSLA, $PCLN, $GILD, $CMG, $UA, all doing incredibly well in this environment. Some are even making new highs. If you took one look at the indices without knowing what these names had done and I asked you to guess how much they were off their highs you’d be guessing double digit percentages, of that I’m sure.
Although it’s perfectly possible a further decline in the broader market can eventually make its mark on them, it still suggests to me there is an element of rotation in this move, and it’s only by continuing to pick stocks on their individual merit rather than having a moratorium on new positions based on what an index has done, that you can identify the strongest areas of the market where you should be concentrating your resources.
That was the case previously in January when the market last had a pullback of this magnitude, only then it was a severe sell-off in momentum names while safe dividend-paying blue chips outperformed. Now it’s the opposite. Most of the exit signals we’ve had so far have been in so-called defensive sectors. The higher growth momentum-type names are still giving entry signals, in fact there were two more this week which I’ll detail at a later date.
Elsewhere, on the futures signals the only ones remaining are Live Cattle, which is now very close to its trailing stop, and Long 30yr which is still defying everyone’s expectations with no ‘rising-rate environment’ in sight. I’ve slowly been winding this part of the blog down, not showing new signals and just taking exits. Despite my best efforts with disclaimers, the inclusion of futures here creates potential issues for what I am pursuing business-wise. Some of you may already have noted the more muted commentary in this area for most of the year. All will become apparent eventually (and it’s all good!), so I hope you can understand I have to make that my priority.
Long 30yr ($ZB_F) 2/3 +$8,468.75 per contract
Long Live Cattle ($LE_F) 3/28 +$3,660.00 per contract