u/Chart-trader

Great! Everything went as planned. On a short term basis charts suggested a continued bull run. And while the way there was choppy it happened.

Charts continue to suggest a continuation of the bull run for now.

Today's retail sales numbers and this week's US bond auction results just dampened the mood a little bit.

I opened another SPY call today. I kept it despite being 60% down because it is not too far away from breaking even.

So why did I reduce leverage again overall?

Short term portfolios are ahead of the benchmarks and benchmark pressure is real.

I have to overcome a short versus long term capital gains tax disadvantage of 40.8% vs. 23.8% every single year.

After tax I am ahead only 4.2% YTD (14.7% vs. 10.5%).

Capital preservation. I prefer return of the investment over return on the investment and will always opt for the former.

It is no secret that my long term accounts are getting closer and closer to my preferred 60/40 allocation.

Everybody from BofA to Leon Oppenheimer thinks that bonds are doomed. They are all correct IMO. On a short term basis we might see higher rates meaning bonds are indeed doomed but....there is no way we will survive rates for higher longer than 12 months.

I strongly believe that once the 10 year yield goes above 5% the US economy will be toast.

And then everybody will head for safety.

Meaning bonds will be very trendy again.

Anyhow I plan on buying more and more long term bonds for long term portfolios.

I am even considering trimming my equity exposure to 50% and below if the S&P 500 makes it beyond 8000-8500.

Let's see. Valuations etc. are very lofty so the party could end any time but charts are charts and for now charts give the green light for a continued rally.

Have a great weekend!

S&P 500: In my book that gap was closed today!

Everything right now is going as planned!

S&P 500: Will this become a breakaway gap?

NDX 100: Let's see if QQQ can break through the down trendline. Although I believe that we can I sold all of QQQ. I will rebuy once we actually made it through.

SOXX: Can semiconductors reclaim the 50 day average or not? If not it might become a problem.

Investment thesis for week 8/17-8/21

TLT: 20 year bonds are on the brink of breaking out of the triangle. We are at 2004 levels. Everybody hating on bonds now but....if we actually break out to the downside we WILL have a recession within 12 months. Time to buy more then.

Ethereum: ETH consolidating above W pattern and 50 day average. I believe that we will break out above 200 day average soon. If not I might just sell my long term holdings. We shall see.

S&P 500: SPY broke out of the down trend (1) and consolidated in a u-shape (up up and away pattern) (2). We should continue to climb along upper bollinger bands. We did not even retest the breakout zone. That's usually a sign that too many investors were caught off guard.

NDX 100: QQQ had an abc correction (1), V shaped recovery (2) and consolidation above 50 day average (3). I would not be surprised if we opened above down trendline on Monday.

Dow Jones: DIA made a potential reversal pattern (1) but the current consolidation is bullish again (2). I prefer a breakout over a breakdown.

Russell 2000: IWM fell out of the big ascending triangle (1) but the consolidation was bullish (2). An expected breakout followed (3) and now we are climbing along the upper bollinger bands (4). Should continue to climb higher.

EUR/USD still above 1.14! Bullish for equities

Put/Call ratio: Put/Call ratio is still at elevated levels making a continued bull run in equities more likely (low conviction).

Current portfolio composition: I had bought QQQ when I posted about QQQ 2 days ago but sold some already. I also played with some options to keep risk down. Leverage is only at 0.83 meaning I will only make 8.3% for every 10% the S&P 500 gains. All closed trades shown.

Detailed YTD benchmark/performance calculation

EOW 8/14: Everything went as expected. Portfolio up 24.8% YTD vs. 13.8% for the S&P 500.

S&P 500 broke out of the recent consolidation range. I played it again with options in the afternoon (one peanut at a time)

Just locked in some options profits (one peanut at a time). Like posted it looked like a bullish consolidation.

NDX 100: QQQ looks more and more like a bullish consolidation above 50 day average