Once again, time to take a look at the markets for the week’s end. We saw a lot of damage done this week.
Obviously that rising wedge formation paid off to the down side. That divergence in the Vortex prove prophetic as well (ha, ha punny). We now have a bearish cross in the VIX RSI and in the Vortex. Bam!
The green lines I’ve drawn indicate where I expect to see support – I’m long here for a bounce, but the Skills Index is on sell – so if we get the bounce, I’m out.
In terms of the weekly mean reversion system – it played very well this past week:
UNG (long – didn’t take the trade): -3.58%
TAN (short): +7.05%
UUP (long): +2.90% – big position so it paid.
We’ll exit all of these on Monday morning so the final results may be a bit different.
For this week – the system is clearly betting on a reversion in the high beta names:
EWP – long – 17%
EWD – long – 19%
EWQ – long – 20%
We’ll see you next week!
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