War erupts in Gaza. Initial reaction is minor, but as the war deepens and gets more complex, US stocks move lower. Long duration US treasury yields are a tremendous headwind for equities.
QQQ Nasdaq 100 33.2%
SPY SP500 10.1%
GLD gold 8.2%
SLV silver -2.8%
EEM emerging mkt -2.9%
IWM Russell 2000 -4.5%
TLT US20 yr -16.4%
My trading account +14.9 for calendar 2023, down a modest 0.3% since the last report. For 2023, I am doing better than SPY, not as good as QQQ. Despite the recent decline QQQ is still having a banner bull year +33%. It is notable that a lot of investments are now down for the year, with TLT having terrible year so far.
I started buying shares of TLT at much higher levels. Thankfully, the position remains small. For now, I’m not adding to longs. I might add to longs in QQQ and SPY if the decline accelerates. I mentioned SPY 370, QQQ 310 as possible levels, so there is still more room before I add signficantly more.
Earlier in the year, a wise old market observer said that when the long bond yield crosses 5%, that would be significant competition for stocks. Looks spot on as of today.
What next? Long time readers know that I get busier with other activities and have less time for trading towards the end of the year. I am already tapering down, the number of trades, and will likely again take several weeks off from trading options. I might still look at the markets and perhaps buy or sell etfs, but very little for options. This month off seems to help me. So for me, a very few trades are in my near future. I won’t swear off options until mid-November, that that is not far away.
