I’m still following that 2006 analogue for the S&P 500 (SPX). I’ve recalibrated it a bit, and we’re back on track. Expectation from here is still for [yet another] 3% pullback over a little more than 3 weeks, before a 5-6% rally takes us into the summer:
The weekly fractals remain in lockstep too, concurring with my thesis:
In conjunction with this analogue, an analysis of the daily SPY chart makes this recent spike to new highs appear as if a classic bull trap peeking out above trendline resistance of SPY’s primary trend, a bull channel:
After some recent trades,¹ I’ve ushered the portfolio back up to benchmark-weight at a 0.76 beta, however our allocation is light with a 50/38 stocks/bonds mix (12% cash). Obviously, my positioning is fully premeditated, as I’m saving cash to buy a dip, while our high beta won’t let us miss any upside. That beta leverage comes from low index exposure, high beta singlenames, and a fair amount of high yield & floating rate exposure in our fixed income sleeve. Our positioning will remain, regardless of my outlook for the next 3% +/-, as I’ve learned not to run and hide to sidestep a mere 3% downdraft.
¹See this week’s timestamped trade reconciliation over at StockTwits