Mr. Market Is Mad

(Oct. 12 Special Update)

The last few weeks have telegraphed Mr. Market’s sentiment - things haven’t been the same since late summer. We’ll go through broader charts. This edition will not be a special 4 part formatted report. This update will be a kitchen sink of a post, beginning with the Stopped Out update, the Laggards, the Top 20 and New Ideas, along with charts for each section. I’ll close with comments and suggestions. First blush it looks like we are primed for a very nice bounce but all price action in Q4 2018 will be of a piece, of new base building for a lofty, ebullient 2019.

One thing at a time. First the Stopped Out reports.

First a short list of LONG ideas which were stopped out that resulted in a notional profit. It’s short list.

Here’s a list of the LONG ideas which were stopped out from A to Z that made a simple loss. A long list. We’ll skip the chart-fest for this carnage. Feel free to shop from this list but it’s a tough one to absorb. It reflects the past week’s more than moody price action.

The Top 20 LONGS LIST is up next.

Not everything has been taken to the woodshed or thrown out with the bathwater. Many familiar names continue to weather the Mr. Market’s abrupt change of mood.

The TOP 20 SELLS ideas almost feels like an afterthought after this week, easily lost in a sea of red.

The notional profit and loss from the Total list of Rooster360’s trendtrading ideas has changed dramatically from the previous week.

First a chart for the notional profit and loss as of this week, and then the same chart from the week before. The notional profit of 485K from 531 LONG ideas is great drop from last week.

The preceding week’s notional P&L was already under pressure and “moody”.

And let’s close on a more optimistic note. More IDEAS for you to consider. I have filtered down to ideas which has hung in through the past week and have some gains from their recent inception dates (dates when they were added to the master ideas universe). I have a few favorite potentials, perhaps you’ll find some too to watch.

It doesn’t matter what you do in the markets but it might matter that you do your best to be able to keep participating. Please don’t bet the farm on emotion or “gut feel”, unless of course you’re Stanley Druckenmiller or someone who can compound year in and year out. Time to look at some big picture charts and get some perspective.

Be patient and be prepared. The next few weeks could be action packed. I wonder however, how biggies like Tepper and Einhorn did with their semi exposure?

The Total Stock Market ETF (VTI) has been treading back and forth for all of 2018, with an expanded trading range, quite a contrast from 2017’s ascent out of the 2015 - 2016 choppiness. Notwithstanding the enormous potential for a bounce, that’s it.

Europe via the German DAX’s cruel summer will continue on to a chilly winter.

Back home the Russell 2000, via the IWM chart, reflects the retreat in sentiment.

Charts reflect a retreat from 2016’s “less than zero” yields which made Ts look great.

Be prepared to sell into rallies which have a strong potential in Q4 2018. I’m a trend-follower and many charts have been “broken” in terms of trend lines, averages and trailing stops. I’m not talking about an epic crash or other melodramatic stuff - this is trader talk. Investors will be able to accumulate some more than fair prices hopefully in the coming weeks and months but the rest of us should move quickly and take advantage of great near term movements. Look past cute stuff like CNBC’s “market in turmoil” and "fintwit teasing of Gartman” - we're grownups. You see the price action and your account P&Ls. Moderate if you’re short-term in your speculation - adjust sizing, be patient, make lists, do more writing of notes and what you’ll do than trading. Let this churn unfold if it does so. Then get to town with your resources and ride new trends in 2019.