Meta Strategy Trading Portfolio – Probability Map Update.

Momentum Crash

While the S&P 500 continues to consolidate within striking distance to its all-time high, the momentum factor is crashing big time.

In its steepest three-week selloff on record, high-flying stocks are touching earth with sales stickers showing 30-50% discounts from recent highs.

However, positive forward-return patterns following similar instances are quite common as massive momentum declines tend to mark temporary bottoms, not tops.

To me the most striking feature of the current market is its resilience: How can the broad market hover near all-time highs when the biggest stocks and sectors have been cut in half?

Other equities must be picking up the slack big time.