The previous week again was quite directionless as the indices danced up and down literally on the back of the US markets. The indices opened sharply lower at the start of the week, then went up and crashed again. . We remain glued to the global markets for cues the next one being the upcoming US elections. More such volatility is expected now.
Unless you were playing on very short time frames it was difficult to do make profits in a trend following fashion as there were no real trends.
STAIRS our trading product was hit some more on these non trending move and lost about 10% odd percent more on capital mainly on Bank Nifty. The Nifty trade is still doing well. It is never a good feel to give back gains but that is part and parcel of a trend following system. Position sizing becomes paramount at such times of drawdown. The BankNifty IVs are also at 38.5 near the flag point and the system will go for 50% quantity as soon as (if) we cross 40 on a daily close basis. We did recover rapidly from the last drawdown and similar is the hope here on as well.
The Options4STAIRS module of STAIRS was a mixed bag. Options strategies on NIFTY gained ground while those on BANKNIFTY got whiplashed badly.
For CY 2020 to date the Options4STAIRS results
Both these models above track STAIRS signal and have defined risk per trade. The Options4STAIRS has now made the STAIRS product accessible to lower capital , is risk defined and has better performance dynamics. For volatile weeks like these options models are easier to handle and trade.
More details on the options models are here
To subscribe to STAIRS
The Weekendinvesting Smallcases were the good part of the week as they did not go down with the markets much . ADANIGREEN, one of the star performers in many portfolios kept the ball rolling . Many other mid and small caps were also performing.
For Monday 2 Nov 2020, the proposed changes are:
Mi_LT_CNX200 : NO CHANGE
Mi_MT_Allcap : 1 ADD, 2 EXIT
Mi_ST_ATH : 1 ADD, 1 EXIT
Mi 25 :2 ADD, 2 EXIT
Liquid bees is not being included as an add or exit.
(IF YOUR PF IS LESS THAN 2 LACS YOU CAN AVOID BUYING LIQUIDBEES BY CUSTOMIZING YOUR ORDER IN CASE MIN INVESTMENT IS BEYOND YOUR EXISTING CAPITAL})
In the LIVE product strategies, there is some churn but there are opportunities for deployment. That suggests the breadth of the market is still intact. All strategies are essentially holding ground so far. The LIVE products area more suitable for large portfolios who are not chasing high returns and want more mature and diversified lower risk portfolios. Also the user here churns his portfolio at Fri 3 PM along with the model and there is no slip between the model the actual experience.
This week Smallcase and LIVE product were the GOOD, and Options4STAIRS was kind of BAD and STAIRS remined UGLY.
We are now at the door step of the US elections. The US market is the leading indicator for the markets globally and is the trend setter. Lets see what is in store for us next week.
All our strategies are ready for any eventuality with capital protection built into our models. We may get hit anytime but we will live to fight another day.
That is all this week. STAY SAFE and stay in peace ! Do share this newsletter with your friends who you think can benefit from the momentum way !