Minerva Market View for Oct 26, 2023
Markets are showing turbulence as we'd expected and positioned for. We remain net short to take advantage of this correction.
Good Evening! Here’s the Minerva Market View for Thursday, Oct 26, 2023:
Positioning and Performance
Our portfolio was perfectly positioned for today’s turbulence and almost all our positions were in the green: our longs were up +0.3% and we gained +1.5% on our shorts vs. the S&P’s decline of -1.4%.
All our longs: SFM 0.00%↑ MCK 0.00%↑ and GLDM 0.00%↑ posted gains, which is great for such a down day. Shorts such as OKTA 0.00%↑ and BIPC 0.00%↑ posted 6% declines. We’re still heavily in cash (t-bills and money market funds) for a net short position of -3.6% of the portfolio. Here’s how the portfolio performed overall:
Market View
The S&P breached the important support level of 4200 today on heavier than average volume. The short-term direction for the market is down until there is a proper washout. It could go all the way down to 4000 or lower (~5% downside from here) with some brief pops when it gets oversold.
Watchlist
We stay flexible and let the price action guide us, rather than get hung up on any forecast. But for now, we will continue to increase our shorts, for which there are many candidates highlighted below. We’re not seeing much to add on the long side for now, although Gold GLDM 0.00%↑ still remains in a good buy zone.
TLT 0.00%↑ (long-term US Treasury Bonds) is going to be an important one to monitor because the markets seem to swoon every time it falls. We don’t want to short it directly but monitor it.
We are also monitoring some low-conviction longs in case they exhibit the right price action: CELH 0.00%↑ AAOI 0.00%↑ ACGL 0.00%↑ AVAV 0.00%↑
We have several interesting short candidates for consideration: ARE 0.00%↑ AWK 0.00%↑ BEN 0.00%↑ CBRE 0.00%↑ COHR 0.00%↑ CSIQ 0.00%↑ DFS 0.00%↑ DOCU 0.00%↑ EDR 0.00%↑ EL 0.00%↑ EVRG 0.00%↑ EYE 0.00%↑ FBIN 0.00%↑ HCP 0.00%↑ HOG 0.00%↑ HR 0.00%↑ IVZ 0.00%↑ JCI 0.00%↑ KEYS 0.00%↑ LOW 0.00%↑ LXP 0.00%↑ MGM 0.00%↑ MS 0.00%↑ MT 0.00%↑ NTRS 0.00%↑ NVST 0.00%↑ OI 0.00%↑ PEAK 0.00%↑ PYPL 0.00%↑ SQ 0.00%↑ STNE 0.00%↑ SUI 0.00%↑ TECH 0.00%↑ TOST 0.00%↑ WPC 0.00%↑ ZBH 0.00%↑ ZI 0.00%↑
Make sure to follow us on X (Twitter) @MinervaCap for updates on positions during the trading day.
ICYMI
Some interesting things we posted/noticed today:
As always, we love to hear back from you! Please share your comments/feedback with us here or over Twitter via Direct Message if you prefer.
Happy Trading!