DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
More Hateful Up Moves
The more the market goes up, the less happy folks are becoming it seems. This is a function, I think, of people convincing themselves what the market "ought" to do based on preferred factors of their choice, rather than what the market is actually doing, in clear sight on stock charts all day every day. I continue to believe that the way to play equity indices is to stay with the trend until it changes, then change one's positioning a little after the trend changes. Right now personally I am very net long indices. I have small, underwater short positions. If the market only ever goes up, this will work just fine; the leverage through the 3x long ETFs means my positioning will continue to outperform the indices despite the modest drag from the 3x shorts. The risk I am alive to is not winding on shorts at the right time to catch the next downturn, whenever that may come. In 2023 my personal errors have been on the short side, not the long side. Underwater longs have looked after themselves in the end, they just required a strong stomach and/or hedging. I have been, as I have documented in these notes and in Slack chat, wary of trapped shorts in this bull market. This is true anyway but I hurt myself by hedging the Nasdaq too early in the March to July move up (I got the benefit of the long side but the gain was hurt by too heavy a short hedge); then selling that short too early to realize a loss (should have held on till the October/November 2023 lows, which would have delivered a nice gain on the short side!). In the July to November drawdown I should have used shorts more but I was constantly worried about the market ripping upwards - as it has since November - leaving those shorts out of the money. It's been a very strong year for me despite the errors on the short side, and that's because I have let the longs run, and indeed added to them at the lows. For now personally I continue to look up, to new ATHs in at least the S&P500, Nasdaq-100 and Dow Jones. Perhaps in the Russell, though that index still has a lot to do to evidence that kind of ambition. Soon enough the market will reverse and that will be the time to be unemotional as always, letting shorts run and being wary of adding to longs. (Unless something fundamentally changes, one need not fear trapped longs if one is not over-leveraged and it is money that one does not need in the near term. So far in the history of US equity indices they have always taken out the lows and then made new highs).
Let's take a look at our charts. Before that a reminder of our two new channels that you can join either as an Inner Circle member - or indeed if you don't pay for our Inner Circle service, you can still join the Van and/or Gains channels, below.
DECEMBER OFFER - Real-Time Trading Channels At Early Bird Discount Prices
We are delighted to now offer two real-time trading channels to which you can subscribe independently of this Inner Circle service. Each features technical analysts focused on helping you find attractive risk/reward trading setups.
Full launch for both is 1 January, but until then you can lock in at a better than 50% discount to the monthly rack rate.
If you've yet to become a paying subscriber of any of our family of services, this is a great low-cost way to start. And if you're already a paying member of Inner Circle? Then you may still like to take a look at these services because they trade with much greater frequency than the ideas in the Inner Circle service itself, offering you a way to find setups for both the medium term and short term, often in the same instruments.
Any difficulties signing up for either service, or if you have any questions whatsoever, you can reach us using this contact form - we'll get right back to you.
Let's Get To Work
Note - to open full-page versions of these charts, just click on the chart headings, which are hyperlinks.