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Abbreviated Weekend Commentary 3/4/2016 – $RUT, $RVX, $SPX, $VIX, $VXV

Overview:

I’m away from home this week so today we’ll go with the short form weekend commentary with charts and some brief comments.  The full commentary will be back next weekend.

The relentless rally in RUT caused us to close the April trade this week at around the max loss.  Even though we don’t like taking losses, it’s part of preserving capital to stay around and trade another day.  I’m working on a recap for that trade this week and we’ll see what we can learn.  I haven’t had a chance to go through the position in detail yet so I won’t offer any thoughts at this point.

Market Stats:

3.4.16.marketstats

Volatility:

3.4.16.SPXhviv
3.4.16.SPXvixvxv

Level Of Interest:

In the levels of interest section, we’re drilling down through some timeframes to see what’s happening in the markets.  The analysis begins on a weekly chart, moves to a daily chart, and finishes with the intraday, 65 minute chart of the S&P 500 (SPX) and the Russell 2000 ($RUT).  Multiple timeframes from a high level create context for what’s happening in the market.

S&P 500 – $SPX (Weekly, Daily, and 65 Minute Charts):

3.4.16.SPXweekly
3.4.16.SPXdaily
3.4.16.SPXintraday

Russell 2000 – $RUT (Weekly, Daily, and 65 Minute Charts):

3.4.16.RUTweekly
3.4.16.RUTdaily
3.4.16.RUTintraday

Looking ahead, etc.:

Next week I’ll continue to mostly watch the market and get a recap out for the April trade that was stopped out this week.  It’s the first public loss for the system, but it was a good loss to take given the persistent move higher in RUT.  I do not hold positions beyond max loss and “hope” the market will come back.

Quick, fast, and brief.  Have a good weekend!

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  • “Even though we don’t like taking losses, it’s part of preserving capital to stay around and trade another day.”

    This is really key to risk management. Those who are not willing to take small losses will one day take the mother of all losses. RUT did something unusual by going up over 14% in 3 weeks. We should expect this to happen every time RUT is oversold.

    • Dan

      Yeah, it’s been a nasty move higher and I’m glad that I got out when I did. The losses always teach us where we can improve and that’s a good thing. The other interesting thing about losses is that it seems like the majority of mine have been on the upside rather than the downside. We’re often told to worry about the downside, but I’ve found the upside far more challenging. Fortunately (and as expected) the BWB’s handled the move without much pressure. Thanks for the comment!