Meta Strategy Trading Portfolio – Probability Map Update.

Buy the Rumor – Sell the News

In a classic pattern stocks rallied in anticipation of the reopening of the U.S. government – only to begin falling as soon as the deal was signed.

This is common around government shutdowns, because the reopening is relatively easy to anticipate.

In most cases eliminating the liquidity bottleneck caused by a dormant government takes some time to take effect, but then becomes a steady, long-term tailwind.

Within the extraordinary momentum environment of the last seven months two main short-term factors have caught my eye.

They support the idea that the market may be moving from a smooth up-cycle of returning confidence to a period of increased volatility and violent pullbacks, which is typical behavior as markets get closer to a broad top.