February’s seasonality is really starting to shine through here as we get into the end of the month. Does that set the stage for a rebound, or is there more selling to come? This is what I’m keeping an eye on for tomorrow and as we get into March.
Mostly at the watchlist level. In other words, a well-executed strategy in the wrong symbol or environment is still an error in the setup. Get the watchlist correct, the trades are easier and the follow-through is better. The volatility in the ES NQ YM and RTY make for difficult trading. It’s not the sell-off, it’s the higher-than-normal volatility. So look elsewhere, and here’s how I build that list.
I have a hypothesis about the current levels and what they could mean near-term for the sell-off. We’re going to continue to focus relative outperformance in a handful of sectors and stocks but not the broader averages. We’re going to stick with gold and bonds to the long side as we have since the first week of February. The “Phase 1 Ag Unwind” is still valid and let’s see what copper and RBOB gas could do next.
This is a video for currency traders and the setups that preceded the rollover in stocks. Following trends in AUD/JPY and NZD/JPY continue to work and don’t let the USD/JPY fool you, yen is still plenty strong.
Energies, Currencies, Seasonal tendencies, as well as the sectors that I anticipate will stabilize first in this current meltdown.
