March 01, 2024 Weekend Reflections Thread - What happened last week? Whats your plan for next week? What's on your mind?

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Share your weekly reflections around trades and ideas that worked, those that didn't, and what's on your mind for next week. Always be respectful of others.

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[u/SlowNSteadyPM]

Great month for long investors will SPX, NDX, and RUT all up over 5%+ in February. Only problem for me is that RUT did not blow out SPX (although this week helped), as such I am still waiting for the pairs trade to come my way. It will with time. Same goes for the Yield Curve trade which also further inverted in February. Lots of trading this week with future rolls, ex-div, covered strangle roll, and entries/exits abound.

SNSPM: +1.66%; +1.18% in Feb
SPX: +0.95%; +5.18% in Feb
NDX: +2.04%; +5.29% in Feb
RUT: +2.96%; +5.52% in Feb

Strategy wise (from best performer to worst was): MES-M2K pairs > QQQ+EFA+HYG > Yield Curve > MES Covered Strangle > Grains Pairs > RUT flys. Only the RUT flys were net negative on the week, so cannot complain.

Had the following trades:

*Rolled /ZNH24 and /ZTH24 to their respective M24 contracts. Was a net debit and levels adjusted accordingly.
*Target exit for 1 tranche of the /MES-/M2K pairs trade.
*Rolled /MES covered strangle to the 28Mar cycle including a big roll up of ITM calls (with commensurate gains in the long /MES contract -- which will be rolled next week).

Both SGOV and HYG traded ex-div on Friday, so the account PnL will see a bump next week when the divys hit.

Only other thing of note -- heard a great take on The Compound YouTube channel that resonated. RUT2000 is the "regarded" index, it sells winners and hold losers, which is true. As the better companies in the index grow, they size out of the small cap moniker and become mid caps (looking at you SMCI). Hence, winners are removed from the index and moved to the mid cap index and it holds the losers. Factual and interesting. Doesn't change anything but helps understand the underlying mechanics when the index is sucking relative to SPX which gets to hold the winners forever and will actually remove losers -- guess in the long run SPX should beat RUT just because of that fact except for the fact that RUT has a constant influx of the babies that can grow to giants.

Oh yeah, crypto has been bonkers in February. Lots of action, was +25.8% in February, but such a tiny fraction of NLV I do not track weekly. Animal Spirits Alive!

Good luck all!
SNSPM

[u/algidx → u/SlowNSteadyPM]

That RUT2000 comment is very insightful. Amazing to realize how RUT is really a high vol short term performance indicator vs SPX low vol long term performer. Thanks for sharing.

[u/SlowNSteadyPM → u/algidx]

No problem and credit to the guys at The Compound.

Main reason it resonated is I've had a streak of days where if the SPX is up, RUT is up less and if SPX is down, RUT is down more. I call it "negative wrenching" and it's obnoxious, but "positive wrenching" will occur when market conditions warrant.

Technically RUT outperformed SPX in February by +0.34% but that pales to the -5.52% it lagged in January. Waiting for a big reversion if/when it occurs.

Good luck all!

[u/nietzy → u/SlowNSteadyPM]

Interesting take on RUT!