Results: another 6/6, but with high volatility
Good predictions, poor execution
Quick summary:
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Last week the predictions were spot on, 6/6 once again.
And yet, intraday volatility on Thursday killed our profits for the week, whcih was a shame as we made quite good predictions on both the earnings, FOMC, and our weekly direction.
More earnings coming up this week (AAPL and AMZN are the ones to watch on Thursday), labor market updates, PMI readings, plus eurozone GDP and inflation numbers, and Bank of England interest rate hike.
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A few changes on our leaderboard this week. Last week’s first ranked player has fallen outside the top 5, but we got two fresh entries. Precision is still very impressive for the whole group. Great job everyone!
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Last week’s performance
Last week was a reminder of how trading for us used to look like back in March earlier this year. Even when we get a decent prediction for the end of week, this happens in between:
Yes, we ended up well within our 2% targets for each indicator (see table below), but getting there was not exactly a walk in the park. Taking positions post FOMC on Wednesday, and a decent gap up open on Thursday following META’s earnings beat (as predicted) was encouraging. But then, the intraday 1.5% swing move down was really unexpected particularly within the context of bullish earnings signals throughout the week. It was most likely a late reaction (typically by one or a few big players dumping positions) to the Fed signaling that higher for longer is here to stay. This type of reaction would usually happen already on Wednesday (when we did have a small but sharp move down). At that point we were looking at a week of missed predictions.
But then on Friday everything bounced back once again, and this was the end result:
6/6 precision, almost pinpoint accuracy across the board, but poor execution. Unfortunate, but not discouraging. The predictions keep getting better and better overall.
This week we still have a lot of earnings ahead, with particular attention on Thursday when we get AAPL and AMZN (after close). So expecting a catalyst for a strong gap open on Friday - up or down, what would you say?
So far, earnings of tech companies all beat the estimates, as we’ve anticipated they would. Not every market reaction was supportive of that, so it will be interesting to see how AAPL and AMZN get by. A beat there will be very bullish in the short run.
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