Ghost Alpha

I find that when I buy the index before buying individual stocks, my performance improves. If you don’t like the general market enough to buy it directly, you’re probably not in your environment.

Most hedge funds can't beat the S&P 500. Quantedge Capital is up 60% YTD. So I went digging through their latest 13F to see what they're holding. Here are their top 15 positions, ranked by portfolio weight: $HLF - Consumer Staples | 18.41% $PVH - Apparel | 12.31% $ADNT - Auto Parts | 5.69% $TNK - Energy / Shipping | 4.93% $GIII - Apparel | 4.59% $SSRM - Gold Mining | 4.17% $YELP - Communication Services | 3.90% $BLBD - Industrials | 3.86% $KYN - Energy Infrastructure | 3.52% $BTX - Technology / Investment Fund | 3.52% $STEW - Investment Fund | 3.33% $BWA - Auto Parts | 3.14% $CALY - Consumer Discretionary | 2.48% $TXG - Biotechnology | 2.35% $NBXG - Investment Fund | 2.29% My guess is that newer positions played a big role in their October performance. Save this list. When the next 13F drops, we'll revisit and see what they kept, what they sold, and what new positions they added. Always interesting to track where the big money is moving.

A data center slowdown won't hurt everyone equally. It crowns whoever owns capacity and squeezes whoever rents it. @chamath's point: the tax breaks are going away, governors will demand measurable local impact first, and the resulting slowdown has consequences. The winners of this scenario, Hyperscalers. $AMZN $META $MSFT $GOOGL Losers are the neoclouds and the model companies. They rent. $CRWV $NBIS This doesn't just apply to AI. Every correction works this way. Constraint reveals who actually owns the asset. Which side is your portfolio on?

The bottom of this channel is about 55% below here. We've been there before. 2009.

Day 1 of a new rally attempt in the Nasdaq. Still under the 200-day line. After yesterday’s break we get an inside day. Completely normal. Not enough to get aggressive when the averages are declining and overhead supply is still there. Following the O’Neil follow-through rules means waiting for Day 4 or later. Being under the 200-day means that patience is key. Bad things happen under this line. Going into the weekend in cash. I'll be screening for names holding up best and showing relative strength, and will share them in the Sunday trading plan. Long week. Have a great weekend!

Every style of investing has its season in the market. The game is won by knowing when to play and when to sit out.

$MRNA has been the strongest name on my watch list through all of the recent volatility. Catalyst and narrative matter a lot for growth stocks. Will it hold up when the next wave of selling hits? We’ll see. Either way, relative strength is what we want in this environment.

If you’ve never traded a bear market, skip Netflix tonight and watch this. @mwebster1971 recorded a 3-hour study of the worst weeks in market history during last April’s crash. 1929, 1987, 2008 are all included. I use his videos like chapters in a book: youtu.be/Rq4Fe8HdyGw?si=UMGf…

I covered my shorts, so of course we will get another leg lower.

No way this is real. There would at least be a few bucks left.

I missed this short entry on the $IWM There will be more short opportunities in the coming weeks.

Closed my shorts and went to cash this morning, including the $BE short I gave paid subscribers Tuesday. QQQ is down 6% and slicing through its 200-day, my line between a bull market and a bear market. This could be capitulation. I'm taking the money now. The setup was simple: a counter-trend rally into the 200-day. I'll show the exact setup soon.

Healthcare remains the only pocket of growth showing relative strength in the market. $OSCR with a breakout from a choppy consolidation. $MRNA also setting up near highs. Tech stocks continue to struggle.

Hard to ignore the move from $XLY today. Here's what's in it:

Money markets are the closest thing we have to a crystal ball. Follow price.

Best thing about being past midterms: No more text message spam in Texas.

Another development I am watching today is the reaction from small caps in the Russell 2000. $IWM has been leading the rally for the last few weeks. Not saying it will close like this, but a downside reversal at the 50MA is not a great look. The inverse ETF is $RWM.