January 2022 is in the books and although I am writing this on 2/6/2022 the market is still playing a dangerous game of cat and mouse with the 200 Simple Moving Average (seen on the graphic as a solid green line).
The 200 day SMA represents long term momentum for trend followers and a line in the sand for institutional buyers – many stocks will disappear from buy lists if they fall below their own 200 day SMAs.
Revisiting the damage done to the SPY (S&P 500 ETF) done since the 1/4/22 high – we’ve returned -5.79% as of 1/31/22.
The Quantum Return Fund, with real world unaudited results returned -4.25% as of 1/31/22. This beat the S&P 500 by 154 basis points.
The High Sharpe Fund, with real world unaudited results returned .81% as of 1/31/22. This beat the S&P 500 by 660 basis points.
The ability to be invested in multiple, non-correlated strategies with edge has once again proven it’s worth in real world circumstances.
January’s down move was significant enough to take the longer term holdings to half weight – which has not happened in a very long time in this major bull market. If the market recovers, the rules will get us back in – but if we continue down, we will be out of long trend following positions until the bear market subsides.
Clearly the market has some more deciding to do.