Alpha Island

Thomas Thornton, Hedge Fund Telemetry info@hedgefundtelemetry.com

1/29/2019

I have to admit I love the Bachelor show where contestants compete for the love of their life all in front of the cameras for someone who is most likely just going to break up with them later on.  I have three older daughters who watch it separately since they all live on their own in different cities.   When it’s on I get a barrage of group texts (in our family chat) so I feel like I might as well watch it.  It’s surreal and wildly addictive like watching a freeway chase live on TV.

I’ve incorporated a similar game with my portfolio where I force myself to eliminate stocks or positions that just don’t work for me.  When looking at my portfolio, I think of which ones can be voted off “Alpha Island” and which ones should get the rose.  OK that’s a bit much I know.  But this is a healthy exercise to do as I know several hedge fund managers that employ a similar strategy with analysts and traders current positions.  I recall hearing Lee Ainslee of Maverick Capital would simply ask his analysts daily if they would buy each stock in the portfolio as a new position.  This put a lot of pressure on them especially as it neared price targets.  If they didn’t want to buy something as it was within 5% of a price target, it would be a candidate for sale.  

Some big weights are reporting in the next three days and I remain cautious after the run yet still set up net long on the Trade Ideas Sheet.  I’m voting off a few more from Alpha Island and adding a consensus favorite to the short side.  Note is a little short and equity focused as I have a lunch today.   I will return emails and send chart requests later.  Thanks

As a reminder I’m speaking next Monday February 4th at the Real Vision “The Workshop” trading conference.  There still are spots and I hope to see you guys there.  

US EQUITY MARKETS

S&P bullish sentiment is at 57%.   Watch 50% as support

 

S&P 500 Index daily stalling

S&P 500 Index 60 minute tactical time frame downside Countdown

Nasdaq 100 Index bullish sentiment is at 55%

Nasdaq 100 Index daily price flip down but also wave 2 

Nasdaq 100 Index 60 minute tactical time frame support at 6600.  Apple tonight could break this 

Dow Jones Industrial Average Index daily sideways

Russell 2000 IWM ETF daily sideways

TRADE IDEAS

Hedge Fund Telemetry Trade Ideas Sheet.  Equity ideas both long and short with one week to six weeks average holding period.  Sizing at inception is either 2.5% or 5% of AUM with stops set between 5%-10%.   ADDING SHORT 2.5% MSFT AND REMOVING WYNN LONG +3.4% GAIN

STOCKS I AM WATCHING TODAY

MSFT is a consensus long with a pattern of lower highs

MCD reports this week and risk is defined

AMZN going counter to the recent upside Countdown.  I think this can move into 1500’s 

WHR one I’ve liked but not in currently trades great for a miss

WYNN reports this week and I’m voting this off Alpha Island.  

EUROPEAN MARKETS – Still look good on long side

Euro Stoxx 50 bullish sentiment is at 43%

Euro Stoxx 50 Index daily making a 2 month closing high

Euro Stoxx 600 making a 3 month closing high

Bloomberg Automated Technical Pattern Recognition Screens

ATPR identifies when major chart patterns are just starting to form, alerting investors to nascent shifts in sentiment.  For more information on this strategy please email us and we will send a detailed explanation.

US Stocks

European Stocks

DEMARK SCREENS – Daily Upside/Downside Exhaustion Signals for January

Daily/Weekly DeMark upside (sell signals) /downside (buy signals) exhaustion Countdown Sequential and Combo “13’s updated daily.  Currently we are only screening the S&P 500 universe and daily in this beta stage.

The DeMark Indicators are designed to assist the user with buying into weakness and selling into strength to anticipate trend exhaustion. Selling into a rally and buying into a decline often afford the opportunity to exit a trade without too serious a loss if wrong.  If you would like more detailed information on the DeMark Indicators, please email us.  

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