Stock market straight talk

It is time for JBP to evolve

Jason Bond
October 27, 2023

Good morning,

The IWM is in a free fall and the goal right now continues to be small momentum trades and capital preservation.

Swing trading small caps against this headwind is asking to be punished.

I think we need to see TBT fall before the IWM starts to trend. As long as that 10-year yield is hugging 5 it has speculative tech and small caps on edge.

My swings ANGI, DDD, and NRDY are drifting with the market but they are within acceptable range given the circumstances. But if markets head lower for another week I’ll be forced to cover the position.

As far as the momentum stocks that were flying high, that pool seems to have dried up too, with very few stocks under $10 up 20% or more the last few days.

This is a bit bothersome because that’s where we were finding opportunities. And I thought it was an indication of a bounce in the overall markets like back in December 2022 and January 2023.

For now I think the best we can do is look for 1-2 hour momentum trades and be cash by close.

At the end of the day I’m not sure what to make of this but I do have some thoughts about how I want to trade going forward, which I’ll share over the weekend. After 12-years of doing this, what I’m starting to realize is the markets change daily and what worked last week might not work this week. I’m no longer sure a ‘single strategy’ is best in today’s world, versus working harder on being well rounded in multiple strategies to take advantage of markets like this.

Simply buying small caps all the time clearly isn’t the answer. I think we’ll need to evolve.

I’ll expand on my thoughts over the weekend.

Chat room

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