Need to add something and re-calibrate. Found an error in my system and actually has profound implications.

Which is also worrisome, that a system would output such different outcomes from just different settings.

The analysis of large data sets can be the same way, that using different parameters, one would arrive at different answers.

//

The biggest change here is that CV-19, a relatively unknown / accidental tail risk changed the outlook and not for the better.

The strangest part is that there is a bifurcation in the market indexes with tech actually outperforming overall.

One of the reasons I had to revamp was due to amazon earnings, and found that this outcome did not fit the prior outcome.

//

The adjustment seems to have affected mostly outcomes to financial companies, which corroborates powell's removal of "banks are sound" statement

However non-tech industries and certain retail / consumer entities will probably be affected as well.

There may also be a pattern toward direct-to-consumer to save costs possibly.

//

The other things affected is the outlook of longer dated bonds, and here the outlook is actually better than previously thought.

Lots of added vol, but is more supportive of treasuries, though the dollar and forex have lost their previous strength.

Lastly energy is affected as well, industrials so there may be a higher likelihood of soft / weaker data

//

aapl w/ china influence shows that asia can throw tech and semis and are not invincible

forex also confirms asian crosses are at risk even the dollar is weak vs swissy

so companies with exposure to energy and china have some issues

The implications for SPY are pretty dire, that after touching low 500s, there will be a return <300

Re-test of CV-19 levels, or a -40% correction. Almost as if a rate cut would be the impetus for such a reaction

QQQ is 50% infotech vs SPY at 25%, further exposure to healthcare and financials vs. QQQ in comm services and consumer disc.

//

The tech heavy allocations may have saved QQQ from as large a predicted drop, froth as things are

The QQQ type put may be self realizing as SPY rotates further into tech seeking performance

Which sets up the possibility of short SPY, long QQQ maybe long gold/bonds in risk off

//

The yield move seems to be overdone on both sides, not sure for what purpose

Destruction of money supply and bank holdings in an attempt to deflate certain assets?

All in favor of inflating away debt which seems to be inevitable, but being held off as long as possible

//

A more nuanced approach would be to avoid certain sectors:

XLF (financial) XLE (energy) XLU (utilities) XLI (industrials) XLP (staples) XLY (discretionary)

But hold XLK (tech) XLV (healthcare) for example, so an environment where individual components matter vs. indexes

//

AKA blue chip growth and narrowing representation of fewer companies on both indexes, larger cap, corporation type havens

small caps, small business put to the wayside in favor of multination operations, specifically those buttressed domestically

given the political climate and slowdown pending in asia vs. euro counterparts.. cash flow went from banks to corps..

//

cyberpunk may have gotten certain things right in a dystopian future, but arasaka / asian representation is not

forex is not favoring asian crosses and even EVs are suffering vs. lower energy costs and alternative fuels

also uncertain about the overtaking wave of human integrated tech though aid in disabilities is promising

//

even the dollar is not immune and weaker vs safe haven swissy counterpart so maybe CHF/JPY is a better carry

semis also seem split, though SMH seems ok +AMD, ASML, NVDA but -AMAT, TXN, INTC, etc. (supply chain risk)

and vol has been bubbling since CV-19 just resting beneath the surface

One of the issues with crosses and so forth is margin of error

Support and Resistance levels can also suffer from false breakouts

To fix this, generate a wider band and only significant outlier would confirm

//

for example on ym 2013 the major timeframe visibly shows a breakout

on the minor, that is resolved by confirming the breakout and support

keep in mind that the ultimate timeframe is the assumption of growth

//

while this may be possible on minor timeframes

larger timeframes usually push a trend

so quick scalps are harder for this reason

Well one of the best funds right here ngl lol

https://www.capitoltrades.com/politicians/P000197

Instead of a SPY/SPX sell, would take on QQQ as the better holdings

Due to the election year, some hovering near resistance is possible

//

Gold and Crypto also running, with dollar waiting rate changes

Unsure of the mrna vaccine outcome, but PFE probably recovers

vs the original rna biotechs mrna and bntx

Having a wtf moment considering forex in asia and w/ my revamp also reconsidering

My original positioning was correct and now seems like asia carries parallel the european crosses

Which suggests that a coordinated effort both fx and bonds from the two largest global economies

//

Inflation being dampened by deflationary pressures in china to suit global import needs

Whereby some point when inflation is sufficiently below benchmark, foreign inflows will start happening into bonds

Commodities / Energy seems to be tamed though metals like gold persist including crypto

//

another piece of the puzzle is that the loss of cheaper mfg in china to vietnam / india

and also onshoring of chip mfg will reach a point where cost of goods will allow foreign currencies to appreciate

let the air out of the dollar and let import/export get rebalanced which is a positive for emerging markets

mag7 not having the best day, the entry here would not be ideal either

although industrials, small caps are lagging, along with yields

may present a safer / better opportunity relative to large cap techs

//

that said, supportive of that sector is semis and chips

start of year has been kind to cryptos

gold has been positioning as well

//

the year of the dragon is upon us

w/ that we focus toward china and fxi

and also baba and antipode fx in giving confirmation

//

small caps also are giving hints w/ industrials

underneath the surface some problems to be solved

but as they are systematically enforced, more growth

in picking mode now, whereby support dictates entry

gold is now a safety as well as bonds

small caps can show signs of sentiment

//

relative to large cap tech which is in dip mode

there are decent alternatives

and forex is also resilient

//

according to the plan, cutting high flyers and buying into support

gamma tends to lead and the dark pool follows through

also dollar is still strong for cash position

//

gamma decreased on the daily and indicates increased vol

which seems to be the case today

and darks followed through

second day of lower gamma as dark continues higher

seems like the bounce is being dampened by higher vol

fx is not reacting as much and yields have stayed

//

market breadth has been positive with advancers to decliners above

suggesting that the contribution of mag7 is not as impactful

trin / arms is also not at an extrema but did present an op late JAN'24

like always we fade the bumberg sentiment as that is the previous old news

we find that our basket outperforms by not taking the crowded route

industrials are doing better in this case and yields are not giving up

//

we also notice that gamma has picked up reducing vol

and that darks have eased off a bit so that large caps are not as shiny

just broke a previous average / personal best on backtesting as well so system is more optimized

//

we are rooting for the small guys here though tech is strong too

energy may hamper some of the industrials

financials are a bigger chunk of the spx

lost the habit of being quick so only thing to add here is energy is on its way