Meta Strategy Trading Portfolio – Probability Map Update.

Momentum VS Mean-Reversion

In a make-or-break week for bears an accumulation of red flags battled extraordinarily strong momentum with moderate success: Stocks went through a mild decline last week, but saw no major deterioration.

The time has come for me to buy aggressively over the coming weeks, because with weakness under control year-end melt-up probabilities are rising.

However, mean-reversion within a runaway momentum regime has a significant probability to continue playing out in October, which could lead to good buying opportunities.

As soon as negative flows revert, momentum is likely to pop back up with a vengeance.