Meta Strategy Trading Portfolio – Probability Map Update.
– Positioning Update Wednesday –
Waning Momentum
Even extreme momentum has its limits and the S&P 500 has now extended into an area where the probabilities for a swing back to an intermediate period of mean reversion has become much bigger than for an uninterrupted momentum continuation.
This sets up conditions where accumulated alerts can finally gain the upper hand: Volatility conditions, positioning, sentiment, and options market dynamics all point to significant short-term headwinds.
A weekly S&P 500 chart shows two weeks of indecision-dojis that visualize waning momentum at an upper trendline.
A support vacuum after last Friday’s OpEx into Wednesday’s Vixperation make this week a prime candidate for a pullback scenario to finally play out.
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