A quick “Thoughts” this morning. I usually check my positions quickly first thing in the morning, see the shifts and make sure that orders weren’t messed up in the night sessions. This morning I had an unusual sight on the screen that I thought I’d mention, since many of you trade in only the stock market and might not notice this.
As many of you know one of my All-Weather trader concepts is extreme diversification. That means I trade 9 strategies across some 36 futures contracts and 20 sector etfs. I tend to run between 40-60 positions on at any one moment which is constantly changing with so many things going on.
This morning, I noticed under my positions column that out of 36 possible futures positions only 5 of 36 were long positions or green. The other 31 were either flat with no position or short. Over on the sector timing side of the portfolio only two positions or 10% of the portfolio was long. Most of my portfolio is in down trends at this point.
I’m not sure what this is telling me on the economy. Could be the start of inflation abating a bit. It could be sensing that we are already in a recession, but the official pronouncement hasn’t happened yet. Demand for some items is in decline, so demand destruction with the higher prices may be kicking in. Whatever the reason, I’m thinking this is not the sign of a robust, hittin’ on all cylinders type of economy.
Whatever the reasons behind it, a whole lot of the markets out there seem to be moving to the downside right now, subject to change tomorrow. In the meanwhile, it’s nice weather this morning in the mountains of Arizona, so Mr. Serenity’s got a 10:40am tee time with my wife. Enjoy the ride everyone!
Hit 'em straight... don't leave those putts short and most important... enjoy the 19th hole afterwards. ETR
Thank you for your commentary Tom. I like your data driven observations. Where can I learn more about your trading concepts (like the All-Weather one)? I am trying to set up a methodical process to enjoy the ride also.