Meta Strategy Trading Portfolio – Probability Map Update.
– Wednesday Update: OpEx and Vixperation window of non strength (see end of “current drivers” section) –
Status Quo
The momentum train rolls on unabatedly as the S&P 500 reached another milestone at 6600 on Friday.
Medium- to long term strength:
We are in a volatility compression regime that is reminiscent of 2017.
In general, such regimes tend to be very sticky and my base case is that we will remain in a solidly bullish trend over the long term.
Short-term pullback:
The consensus is shifting from deep skepticism of this rally to hyper-bullish sentiment.
This may be a bit premature as the worst seasonal period is only starting right now (supported by a number of additional red flags).
Complacency may easily lead to a perfectly normal 4-9% down-swing within a momentum rally, but timing such a pullback is difficult – we will know it when we see it.
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