After a week’s pause, institutional sentiment returned to the positive bias seen throughout October, with widespread buying driving many stock prices up – so much so that price rises of many stocks were the largest of any week in many months, if not the entire year.
For us it means extended gains in many long positions, or in the case of oil-related stocks at least a narrowing of deficit positions. Among our shorts, however, it means gains diminished and more exits. High number of trades this week as this broad-based buying cycle continues, with new weekly highs exceeding new weekly lows. As with most of 2015, still seeing above-average number of weekly trades with shorter-than-average trading durations.
Also seeing once again a number of “explosions and implosions”- abrupt, significant price changes up or down in reaction to news-driven surprises. As has been the case historically, the majority of these large moves were favorable – in the direction of our existing positions (NOAH, TRUE and XOXO), although there were a few contrary moves which resulted in losses (SEAS and SFM).
The major indexes are now positive on the year, albeit barely, around 1-2%.
Highlights: 9 new weekly highs. Double-digit long gains in CALL +29%, LUV +17%, MESG +26%, NOAH +32% on large rise, TRUE +30% on large rise, and XOXO +11% on large rise.
Only 2 new weekly lows. Double-digit short gains in AHGP +12% and MDXG +21%. Locking in short gain of +17% in NVIV (6 weeks).
Analytics: Incorporated a few tweaks to formulas – confirmed effective after extensive back-testing – that will help us better hold long positions through short-term turbulence and exit some short positions sooner under particular circumstances, both for greater returns. Now using Version 47.