Positioning

Came into week with 10 longs and 2 GLD safe havens for 120% total exposure and 80% net long exposure.

2 SPY (4/17)
2 XLF (6/28)
2 INDA (7/5)
1 QQQ, 1 SMH (7/7)
2 EEM (7/10)
2 GLD (7/11)

Adjustments
7/24: - 2 SPY short hedges
7/26: -2 XLF, out; +2 SPY to cover hedges; +2 QQQ to maintain positioning
7/27: -1 SMH, -1 EEM, -2 QQQ

Leaving
2 SPY (4/17)
2 INDA (6/28)
1 QQQ (7/7)
1 EEM (7/10)
2 GLD (7/11)

This may be too light. I opted to raise cash instead of hedges given all the caution signals as outlined in the last Total market view. I could have kept more longs and added IWM shorts and/or UVXY hedges. Might be looking to add something on Monday. 

This will likely be the last positioning post. I tried this as experiment the last several months to show more clearly how trading with Pivotal Strength can benefit one's account. For example, some big calls on positions or highlights on sectors in 2016:

EWZ mentioned as buy February 2016, and mentioned often afterwards
SOXX encouraged March 2016 and mentioned frequently afterwards
XLF encouraged in 2016 Q4 before the election jump
IWM mentioned as main index leader post-election

All these produced huge outperformance over simply buy and hold on SPY. In addition, I am fierce about reducing exposure in downtrends and although some shuffle costs a bit at times, and looks completely unnecessary in a year like 2017 - which has the second lowest SPX drawdown since 1928! - I am experienced to know that at some point, probably rather sooner than later, protection will be quite worthwhile. 

I also wanted to show some of the methods employed achieving world beating 110% returns at a small hedge fund that was running ~100M AUM. In fact, at that fund the gains were due to even more leverage and concentration that what I typically have done here. Those returns involved huge gains in certain individual stocks, hedging portfolio via futures, and benefitting from a massive currency trade. 

But this does take extra time to review all these charts and when that time is lacking, I feel that portfolio could be better. This happened in 2017 Q1 when I didn't rotate into tech or global stocks soon enough. It is likely that time available for this project will reduce in the near future. 

Also, lastly, positioning totally depends on:
your position as investor or trader
tax status of account
flexibility of account (ie margin or willingness to use leverage)
costs - as this is an active strategy, it assumes commissions are small fraction of capital

As such, I will return to certain setups that I will continue to try to mention, but execution part and day to day listing will likely not continue. 

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Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week:

2 SPY (4/17)
2 XLF (6/28)
2 INDA (7/5)
1 QQQ, 1 SMH (7/7)
2 EEM (7/10)
2 GLD (7/11)

10 longs or 100%, 2 safe haven hedges for 80% net. 

Adjustments
Watching carefully, but none last week.

*

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week:

2 SPY (4/17)
2 XLF (6/28)
2 INDA (7/5)
2 IWM (7/7)
1 QQQ, 1 SMH (7/7)

Adjustments:
7/10: -2 IWM, +2 EEM (whew!)
7/11: +2 GLD
7/12: None
7/13: None
7/14: None

I entered the week with idea of adding leverage on bullish resolution of congestion of the prior week, but seeing the 3rd highest ISEE reading of the decade on 7/11 meant i opted for GLD instead. This position is up but probably stocks would have been better.

Currently 10 longs for 100% plus the 2 GLD so actually 80% net. 

Positioning

Came into week:

2 EEM (3/13 & 4/3)
2 SPY (4/17)
4 SPY (4/24, 5/23)
1 USO (6/26)
2 XLF (6/28)

-1 SMH short 6/26)
-2 FXI short hedges (6/29)

And had said ready to cut SMH and USO.

Adjustments:
7/5: +2 INDA
7/6 open: 2 UVXY hedges
7/6: -2 EEM, -4 SPY, +1 UVXY
7/7: -1 UXVY, +2 IWM, +1 QQQ, +1 SMH

So, the UVXY hedge worked great on the big down day 7/6 and was a savvy move considering everything (stocks, bonds gold) was red. Took gains on close on 1 unit since also cutting exposure, and the other early 7/7 as XIV bounced from Q2P and VIX fell below 2HP. So that was smart. 

However - and yet another false breaks in 2017 which are trying my patience - again cost to go defensive! What were the reasons to reduce on 7/6? Oh, only selling from yearly levels on 4 (!) of 5 USA main indexes and VIX above a long term pivot for the first time since November 2016! Oh never mind, bulls roaring back the next day. There were several buy choices and opted for mix of tech (first touches of weekly 20MAs in months, correction maybe over; and IWM, pivot leader compared to tech. 

100% long, may add further with bullish resolution this week. 

2 SPY (4/17)
2 XLF (6/28)
2 INDA (7/5)
2 IWM (7/7)
1 QQQ, 1 SMH (7/7)

*

Long term investors can do this analysis on weekly charts using yearly, half-year and quarterly levels only. More about this soon.

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Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Entered week 80% long after taking gains on QQQ and KWEB on 6/20. 

Current
2 EEM (3/13 & 4/3)
2 SPY (4/17)
4 SPY (4/24 & 5/23)

Adjustments
6/26: 1 USO long, 1 SMH short (both of these fantastic moves!)
6/27: 2 FXI short hedges
6/28: 2 XLF, 2 IWM with tight stop, cut FXI
6/29: -IWM stopped out, 2 FXI short hedges again
6/30: None

Current
2 EEM (3/13 & 4/3)
2 SPY (4/17)
4 SPY (4/24, 5/23)
1 USO (6/26)
2 XLF (6/28)

-1 SMH short 6/26)
-2 FXI short hedges (6/29)

80% net

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week 100% long with no hedges or shorts.

Current
1 QQQ (12/7)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20) nice idea, better to have more
4 SPY (4/24 & 5/23)

Adjustments
6/20: Out of QQQ and KWEB, so far mistake. 

8 longs or for 80% net long.

These have been great winners and only issue has been not having more. Took gains on expected re-balancing profit taking but so far looks like error. 

*

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week 100% long with no hedges or shorts.

Current
1 QQQ (12/7)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20) nice idea, better to have more
4 SPY (4/24 & 5/23)

Adjustments
None

*

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

I may have bitten off more than I can chew with this project, as other work has been quite busy most of the year leaving less time for proper chart analysis across asset classes every day. Positioning is doing OK but could have been far better with quicker rotation into tech, as market commentary identified QQQ as main index leader from mid January. This should have been more reflected in positioning. That said, I did nicely get out of IWM early, gradually reduce and then fully exit out of XLF, rotated into EEM and INDA both before big jumps, and caught the move in KWEB from 4/20+.

Recently I have been just going to SPY to benchmark to index. I have been suspicious of last move from 5/18 lows.

Current
1 QQQ (12/7)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20) nice idea, better to have more
4 SPY (4/24 & 5/23)

Adjustments
6/5: 2 IWM short hedges
6/6: None
6/7: None
6/8: covered IWM shorts for small loss
6/9: None

Back to above, 100 long with SPY concentration. Could have rotated into XLF with move above Q2P, but short term charts very overbought.

Positioning

Came into week 60 net long with 2 shorts and 2 hedges.

1 QQQ (12/7), 1 unit hedged on 5/17
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20)
2 SPY (4/24), 1 unit hedged 5/9
-1 IWM short (5/17 open)
-1 XLF short (5/17 open)

Adjustments
5/22: covered QQQ and SPY hedges
5/23: +1 IWM, +1 XLF short covers; rotated out of INDA into SPY (sigh, not a good move)
5/24: none
5/25: none
5/26: none

Defensive moves cost slightly as market basically had a false break - given SPX YR1 and NDX YR2 rejection, monthly pivot breaks, along with VIX & XIV confirmation there would be bit more trouble before recovery.

Another false break in INDA - steadiness of the bid is remarkable. Typically after a run of above all pivots for 4 months a break reaches at least an S1 level. 

Current
1 QQQ (12/7 - would love to have added more on that!)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20) nice idea, better to have more
4 SPY (4/24 & 5/23)

10 longs for 100% net with SPY concentration. More tech would be better. 

Positioning

Came into week 80% long via 2 longs and 2 short hedges.

1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20)
2 SPY (4/24)

4/20 and 4/24 buys right idea but too bad not more tech, as IWM and SPY disspointing in comparison. Check previous posts via tag for analysis and other blog posts on best moves from 4/20 low. 

-2 SPY 5/9
-1 QQQ 5/9
+1 SPY 5/11

Adjustments
5/14: +1 QQQ short hedge cover
5/16: none
5/17 open: -1 QQQ short hedge, -1 SPY short hedge, 1 IWM short, 1 XLF short
5/18: none
5/19: +1 SPY short hedge cover

Currently
1 QQQ (12/7), 1 unit hedged on 5/17
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
1 KWEB (4/20)
2 SPY (4/24), 1 unit hedged 5/9
-1 IWM short (5/17 open)
-1 XLF short (5/17 open)

10 longs, 4 shorts/hedges = 60% long.

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week 120% long via:

1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
2 IWM (4/20)
1 KWEB (4/20)
2 SPY (4/24)

The 4/20 & 4/24 buys were very much right idea, but other vehicles would have produced a much better return. Analysis here and here. 

Adjustments
5/8: None
5/9: Sell 2 IWM, 2 SPY short hedges, 1 QQQ short hedge to reduce to 70% net long
5/10: None
5/11: Cover 1 SPY, 80% net long
5/12: None

Currently 10 longs, 2 short hedges for 80%. 

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week 120% long via:

1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
2 IWM (4/20)
1 KWEB (4/20)
2 SPY (4/24)

So the mistake was not piling back into QQQ on 4/20 instead of SPY & the disappointing IWM. I don't know why I have been somewhat reluctant on QQQ this year. In January was already fully long other vehicles, and simply shifting over would have doubled SPY gains. The recent drop was the first real pullback and there was a chance to add back in QQQ but went with IWM thinking some rotation, but that has been wrong.

Adjustments
5/1: None
5/2: None
5/3: -1 EEM short hedge, -1 RSX short
5/4: None
5/5: covered EEM short hedge and RSX short (both moves small gains)

So list back to same as above. 

*

Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into week with 10 longs or 100% long via:

1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
2 IWM (4/20)
1 KWEB (4/20)

Per Daily comments after close, made these adjustments:

4/24: +2 SPY, leverage long 120%
4/25: None
4/26: None
4/27: None
4/28: Perhaps should have taken IWM off, but didn't specify.

For the current week MayPs will decide. IWM got crushed 4/28 and with VIX reversal may have been better to exit. At the same time, end of month selling often reversed in the new month. We'll see what happens. 

Q1 Positioning results

This isn't audited, but I calculated all the moves and weightings I have suggested for 2017 Q1. It wasn't great - about a match to SPY at 5.73% not including commissions, leverage costs which are not so much considering the ETFs I am using almost all have leveraged versions, or slippage. But if you followed suggestions in 2016 Q4, with IWM, DIA and XLF overweight, you would have crushed it. 

I'm not doing all this to match SPY so let's see what happened. Consider that 2017 Q1 positioning entered with IWM, XLF and DIA and all of these underperformed SPY for Q1 overall. So how did I match? Gradually rotated out of IWM, and caught some XLF on the gain, then got out of that somewhat decently. While later in the move, I did rotate into EEM and INDA before significant pops. And a few hedges made a bit of money too. 

Key mistakes were trying to hold the 2016 Q4 winners and not just going to more cash and rotating into the new buy signals on QQQ, EEM, INDA, etc. I think this is key point going forward - I just have seen so many definitive moves at the start of quarters. In fact a leveraged fund could trade these moves by doing analysis the last 2 weeks of each quarter, being very active the first two weeks of the new quarter, then monitoring from there for 2-4 weeks, and having a 4-6 weeks off after that. :)

But jeez it would have been so easy to decently beat SPY just by having overweight QQQ or SMH or most especially my pick from 2016 Q4, KWEB Chinese internet ETF, double the gain of QQQ. Day job got busy in January and I just didn't have my usual time for analysis, but before I go on too much in a way that sounds like excuses, that is what happens if you actively manage. Some moves are missed. Too bad. 

I don't mind if matching SPY is what i consider a very mediocre quarter. 2017 Q2 is doing OK. Major calls correct on the 3/1-2 highs and then both 3/27-28 low and 4/17 rebound that mattered, but portfolio got chopped a bit when market was hammering out lows last week. Also, key point, safe haven strength was noted but not traded - I will be including safe havens in portfolio positioning going forward. 

Positioning

Came into week:

1 DIA
1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)

2 IWM short hedges

40% net long

4/17: IWM short covers, +1 DIA, +2 SPY, +1 EWZ
4/18: none
4/19: -2 DIA, -EWZ
4/20: +2 IWM, +1 KWEB
4/21: None

Chopped with aggressive buying 4/17, then immediately taken out with DIA and EWZ fail.

I may have been too eager to buy the Q2P pivot holds and upon reviewing these entries realized everything that failed did not have rising MA or MACD support. 

Best entries: 
Pivot test and hold
Rising MA clear (more than one even better)
MACD recent cross or about to cross (tweaked settings 7, 12, 5)

While I almost never enter without a pivotal reason, it is clear that most better entries over the months & years have had two of three and often three of three conditions listed above. The impressive catches of turns like 7/8/16 TLT short and 2/12/16 DIA long were both speculative ie a short above all pivots and long below all pivots; 10/17/14 QQQ buy (before this site) held 1HP exact and reclaimed D200 so that is indeed two of three. 

Additionally, I started the positioning meter last fall to:
quantify stock index strength
emphasize current leaders
clarify when I thought leveraging and hedging were appropriate

Initially I left save havens off the possibility list just due to time and tracking. But in reality buying safe havens is easier and often more profitable than shorting, even if those shorts are hedges. It would have been better to take long exposure down by GLD, VIX and then partial TLT - though I don't regret taking gains on Q1 overweight XLF. I will try to keep this in mind for the future. 

Current
1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)
2 SPY (4/17)
2 IWM (4/20)
1 KWEB (4/20)

10 longs - 5 global, 5 USA

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Positioning information
1 position represents 10% of capital.
Limits: 15 or 150% long, -50% shorts, hedges or safe havens, 200% max total exposure.
Currency & commodity positions are not included in this system.

Positioning

Came into 4/10 week:

2 DIA (first positions near election with shuffle week of 1/30)
1 QQQ (12/7)
2 SPY (2 on 1/3)
1 SMH (1/18)
2 INDA (3/3 + 3/28)
2 EEM (3/13 + 4/3)

2 EEM short hedges 4/5
2 IWM short hedges 4/5

10 longs, 4 short hedges, 60% net

Adjustments
4/10: None
4/11: None
4/12: -1 SMH, cover EEM short hedges, adding QQQ hedge back on
4/13: -2 SPY, -1 DIA, cover QQQ short hedge

Leaving
1 DIA
1 QQQ (12/7)
2 INDA (3/3 & 3/28)
2 EEM (3/13 & 4/3)

2 IWM short hedges

40% net long

As noted in a few daily comments, from here I will include safe havens as positioning options instead of short hedges. GLD and even TLT on buy signal, even VIX, all easier and more profitable than shorts. 

* * *

Positioning limits
15 or 150% long, -50% shorts or hedges, 200% max total exposure. 

Currency & commodity positions are not included in this system. 
Share

Positioning

Came into week with:

2 DIA (first positions near election with shuffle week of 1/30)
1 XLF (pre and post election)
1 QQQ (12/7)
3 SPY (2 on 1/3, added 1 3/28)
1 SMH (1/18)
2 INDA (3/3 + 3/28)
1 EEM (3/13)

-1 QQQ (3/31)

11 longs, -1 short hedge, 100% net. 

Adjustments
4/3: -1 XLF, +1 EEM; -1 SPY, +1 EWZ
4/4: None
4/5: -1 EWZ, 2 EEM short hedges, 2 IWM short hedges
4/6: QQQ short hedge cover
4/7 None

Currently

2 DIA (first positions near election with shuffle week of 1/30)
1 QQQ (12/7)
2 SPY (2 on 1/3)
1 SMH (1/18)
2 INDA (3/3 + 3/28)
2 EEM (3/13 + 4/3)

2 EEM short hedges 4/5
2 IWM short hedges 4/5

10 longs, 4 short hedges, 60% net

Positioning limits
15 or 150% long, -50% shorts or hedges, 200% max total exposure. 

Currency & commodity positions are not included in this system. 
Share
 

Positioning

Came into week with 11 longs & 1 short hedge but ready to exit on weakness. 

2 DIA (first positions near election with shuffle week of 1/30)
2 XLF (pre and post election)
1 QQQ (12/7)
2 SPY (1/3)
1 SMH (1/18)
1 INDA (3/3)
1 EEM (3/13)
1 IWM (3/16)

-1 SPY short hedge (3/2)

Adjustments
3/20: None
3/21: IWM and XLF exit, FXI short hedge (against the EEM long)
3/22: Covered SPY short hedge
3/23: Added SPY short hedge
3/24: Covered SPY again

Currently:
2 DIA (first positions near election with shuffle week of 1/30)
1 XLF (pre and post election)
1 QQQ (12/7)
2 SPY (1/3)
1 SMH (1/18)
1 INDA (3/3)
1 EEM (3/13)

-1 FXI short hedge (3/21) 

9 longs, 1 short hedge, 80% net. 

Positioning limits
15 or 150% long, -50% shorts or hedges, 200% max total exposure. 

Currency & commodity positions are not included in this system. 

Positioning

3/6 week started with: 10 longs, 1 short hedge, 90% net

2 DIA (first positions near election with shuffle week of 1/30)
3 XLF (pre and post election)
1 QQQ (12/7)
2 SPY (1/3)
1 SMH (1/18)
1 INDA (3/3)

Adjustments (all posted in Daily comment after close)
3/6: None.
3/7: -2 IWM short hedges, 70% net long
3/8: None
3/9: +1 IWM short hedge cover, 80% net long
3/10: None

3/5 week ends & 3/13 week begins with 10 longs, 2 short hedges, 80% net.

3/13 week
3/13: +1 EEM, 11 longs, 2 short hedges, 90% net long
3/14: +1 IWM short hedge cover; also -1 XLF, 10 longs, 1 short hedge, 90% net long
3/15: None
3/16: IWM long, 100% net
3/17: None

3/13 week ends with 11 longs, 1 short hedge, 100% net long. 

So adding INDA 3/3 and EEM 3/13 have done very well, as well as nice covers on IWM short hedges for gains, and taking gains on 1 of 3 XLF before the big drop last week. I may have gotten lucky, but I thought there might be a buy the rumor sell the news on the rate hike stuff, and instead got even more a reaction. Even though increased long exposure as of 3/16 close back up to 100%, IWM doing fine. Even though easiest $ this year was loading up long leverage long in Feb on tech and global stocks - which i didn't do - last moves have been a bit of alpha for Q1. 

Thoughts from here - Given moves in both stock indexes and safe havens I think index drop is the next move, but this is not something to play heavily since all indexes dropping onto support. Anything not above all pivots is candidate for take (so if IWM drops back down under MarP, that would be a quick out). Anything rejected from major levels or below levels is also a candidate to take gains or hedge.

Also keep in mind new quarters often bring new buy signals. Heading into 2017 I was determined to hold longs from November, and this actually cost quite a bit of gains as I was in heavily in IWM, DIA and XLF and this meant not as much capital for QQQ and EEM & other global index buys that were given early in 2017. 

Given the year thus far and DXY weakness, I'd like to hold INDA and EEM longs. Global longs just 20% of portfolio and they may turn out to be the big winners of 2017. Tech and SMH have continued to be very strong. XLF might be the next take, or simply add an SPY hedge based on cluster resistance. 

*

Positioning limits
15 or 150% long, -50% shorts or hedges, 200% max total exposure. 

Currency & commodity positions are not included in this system. 

Positioning

Portfolio returned to 100% long early February and did not make an adjustment for a few weeks. 

Heading into last week it was:

2 DIA (first positions near election, with a shuffle week of 1/30)
3 XLF, 1 QQQ (pre and post election)
2 SPY (1/3)
1 SMH (1/18)

9 longs or 90% long, no shorts. 

Adjustments (in daily section after close)
2/27: None
2/28: QQQ hedge short
3/1: Out of QQQ hedge short
3/2: 2 SPY hedge shorts
3/3: Cut 1 SPY hedge short, add 1 INDA long

Current
2 DIA (first positions near election with shuffle week of 1/30)
3 XLF (pre and post election)
1 QQQ (12/7)
2 SPY (1/3)
1 SMH (1/18)
1 INDA (3/3)

1 SPY hedge short 3/2

10 longs, 1 short = 90%

If week is bullish thinking to add on global stocks INDA, EEM, EWZ. If bearish can put SPY hedge back on, and IWM is also a hedge trade candidate, or take gains on SMH. 

*

Positioning limits
15 or 150% long, -50% shorts or hedges, 200% max total exposure. 

Currency & commodity positions are not included in this system.