May 2016 Results

Last month was challenging, to say the least.  After a deep retracement of the drop from 2134 to 1810, SPX began a well-formed, falling channel that lasted from Apr 20 to May 19, at which point SPX had completed two large Head & Shoulders patterns2016-06-10 May 60-minBeginning on May 24, though, things got very “interesting.”  SPX broke back above the H&S necklines and out of the falling channel on a series of algo-driving rallies in oil futures (CL.)

After three straight days of nearly 1% gap openings (yellow arrows above) with very little retracements, the downtrend was broken.  Ironically, CL advanced very little during this period.  The gains came almost exclusively during market hours, after which CL reset for the following day.2016-06-10 CL 60 MayMost sessions during the month were gap openings, and most of the rebounds featured meltups — my least favorite “market” to chart or trade.  Nevertheless, we managed to generate decent results for the month at 9.49%.

2016-05 daily results This was a little lower than earlier in the year when we saw more volatility.   But, Isuspected as much when we entered the dangerous period between the previous all-time high of 2134 and the .886 retracement of the drop from it to 1810.

2016-05 Monthly PerformanceFWIW, June is shaping up to be every bit as “interesting.”

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