Extreme-os trading system is up 29% for 2012, up 46% for 2013 and currently up over 20% for 2014.
This trade showed how treacherous this market could be. On 4/21/14 ATHN which is currently in a long downtrend, had a big down day. On 4/22, ATHH showed sign of reversal and we entered at 132.5. ATHN gap up the next day on which we promptly exited for a 6pt gain. It is tempting to hold on for a larger gain, especially when the stock is at 170 just a couple weeks back. ATHN continues its down move into the 122 area. What a nice exit on this trade !!
Hedgefunds shorting small caps. Bloomberg .
This is why we have so many opportunities currently. Just have to hit the right one.
Lately, hi flying momentum stocks in biotech and social media have been crashing. These stocks also have been more volatile. We need to be more careful on position size and not to be too concentrated in similar sectors. We have not seen this kind of volatility since mid 2012. There are no major economic crisis driving the market this time. Now, it seemed that markets are undergoing in some kind of rotation, switching from hi flyers into safer mature dividend yielding stocks.
Pension Partners commented about this momentum breakdown in details.
Hopefully, this will allow us more opportunities and more chances of getting in rebounding stocks. The strategy is holding up well in this market correction. Extreme-os gained over 7% in March and continues to hit new hi in April.
PANW had a down wave from 80 hi to 70. After a pause, it continues down 3 days in a row for a 2nd down wave. PANW now is quite oversold and has drop from 70 to 60, about the equivalent from its hi. We entered in the 59.5 – 60 area. We exited the next day for a nice 4.5pt gain. Notice the increase in volatility after February. Also, NASD has not corrected much from its high, so potentially could fall more from this area. Thus , we do not want to be aggressive here and scale down position size a bit.