Meta Strategy Trading Portfolio – Probability Map Update.
– Positioning Update Thursday –
Holiday Trading
In typical fashion, the stock market drifted higher during Thanksgiving week.
As this is only the first of several such low-volume holiday periods between now and January, let’s look into the mechanics, which can be expected to play out again.
Mechanical flows dominate the market, as there is little active trading going on, which means that the tailwind of time passing during a quiet period is sufficient to cause a drift higher for equities.
While these flows are strong, with support from the current momentum market and re-covered market breadth, equity positioning has now reached unsustainable levels.
It is only a question of time until this extreme normalizes via a sharp pullback.
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