Current Systematic Positioning:
- Long S&P 500 ($ES Emini Futures)
- Short Gold ($GC Gold Futures)
- Long Mexican Peso ($6M Futures)
- Long Soybeans ($ZS Futures)
- Short Corn ($ZC Futures)
- Long Bitcoin (BTCUSD Spot) + Added another leg long this week
Current Performance:
- Macro Ops Portfolio: +7.9% year to date
- S&P 500 Index: -3.31% year to date
Our focus on the Macro Ops portfolio is to achieve low volatility, uncorrelated outperformance to the index.
Check and check.
I’ll get into a little more detail about our Bitcoin positioning, but first I want to let you know that the Trading Thunderdome starts on Monday – and this time it’s different!
The next cohort of The Trading Thunderdome is going to be focused on using AI and LLM’s:
- Using AI to build and test trading systems (no coding required)
- Building live dashboards for tracking markets, trades, PnL, setups, and market regimes
- Automating research, data analysis, and journaling
- Structuring your entire trading business with tools that run while you sleep
Over the years, we’ve helped traders build systems from scratch, test ideas, refine edges, and structure real trading businesses. But the way we do all of that is going to get a LOT better.
Why?
This isn’t just about trading ideas. This is about building the infrastructure that powers a real, repeatable, edge-driven trading business.
AI isn’t here to replace traders. But they will absolutely replace the ones who don’t learn how to use them.
You don’t need to be a coder.
You just need to be willing to build.
We’ll show you how. We’ll use all sorts of tools, free tools, paid tools, we’ll go down rabbit holes, we’ll have a lot of fun learning this stuff.
The new cohort starts tomorrow.
If you want in, now’s the time.
You can join here, and get started with us on Monday
Now let me show you what I built.
The reason we added to our longs in Bitcoin is through the work I’ve done building that system with AI.
There are a million different things happening in the markets every single day.
Earnings. Economic Reports. Headlines. Wars. Cease Fires. Rumors of Wars. Rumors of Cease Fires. Elections. New AI product releases. Tariffs on, Tariffs off.
I could be tempted to use LLM’s to help me with that, and I have some examples of them giving me ideas of strategies to build and test out based on future outcomes.
But none of it is part of my trading.
By the time you’ve gotten the news, the markets have already reacted…over reacted.
Sure an unexpected headline can cause a loss (or a win) on a trade, but it shouldn’t be anything that takes you out of the game, if you are sizing your trades correctly.
Trading is about finding an edge, knowing when that edge can be exploited, and by how much. No one strategy will work in every market all the time, so the critical element is to find out when it works.
For example, you will get sliced to pieces if you try to trade a breakout/trend strategy in a mean reverting market. What about trying to fade a rally, or catch a falling knife in a firmly established trend environment.
The point is, you want to be playing the right game at the right time.
That doesn’t mean that every trend trade you do in a trending market is going to work out, but your chances of performing better overall, are a lot higher.
With all that in mind, we just got our buy signal on Bitcoin this past week.
This is the Risk On signal, the “now it’s trend time” signal for all of crypto.
This is why we added to our previous mean reversion long signal earlier, one system (a mean reversion system) “bought the dip”, meanwhile it then moved into a new trend long.
The way this works is we get our big overall signal that Bitcoin is in a long only momentum phase and that is a longer term overall signal.
You can take that information and just go buy Bitcoin if you like, or not, but that’s just one part of it.
The Crypto Momentum system, and that’s the system I’m talking about here, is either ON or OFF .
This was the ON signal.
And sure catching moves like buying Bitcoin at 25k and selling it 200% or 300% higher is cool, but that’s not the main part of the system.
As Bitcoin rises, traders start growing their accounts. Crypto as a whole starts to become more interesting. Traders start looking at new projects, speculating which will be the next Solana or Ethereum.
And that kicks off buy signals in different crypto sectors, like AI, Layer 2, De-Fi etc…
The Crypto Momentum System identifies those, and that’s where the big returns are.
The last time we got this signal was October 2023, we 15-20x’ed our crypto accounts using the Crypto Momentum System all through the end of 2024 when we got the sell signal at the peak.
Once we got our sell signal in the different crypto sectors, it was brutal to be a bull.
Some sectors lost -30%, -50% even as high as -88% (Large Cap Meme coins were hit the worst) immediately after we got the sell signal.
If you were trading the Crypto Momentum System with us you would’ve been in for all the fun, and gotten out before it got ugly.
Again, we want to be trading the right system at the right time.
Now is that time!
Comparing the previous two bull markets, 2016-2018 and 2019-2021 to where we are today. If history is a guide, and by the way it’s just a suggestion more than anything, the next 200 days for Bitcoin are the strongest.
Every 4 years +/-, Bitcoin halves the amount of block rewards, that is how many Bitcoins are rewarded to miners each 10 minute block.
Meaning the supply of new Bitcoin coming into the market is reduced by 50% every four years. This has typically led to a 600’ish day rally in the crypto market.
The last halving was April 2024, we are about 400 days in.
In this chart you can see how Bitcoin has performed in the two previous post halving cycles, the white line chart is our current Bitcoin % returns after the last halving.
As you can see we still have a pretty nice opportunity, and this last period is a strong period ahead.
The biggest % gains happen in the last part of the post halving cycle, but it isn’t just Bitcoin, it’s the alt coins where the real high flyers are.
This week, we received our first buy signal in one of the Alt sectors we follow.
What a perfect time to happen, just after a big correction in traditional markets.
Everyone is nervous, cautious, maybe even on the sidelines.
I say It’s the ideal time, because everyone is off the train when it leaves the station…and they’ll have to chase it to get back on.
This is why we have systems. To do the right thing when it doesn’t seem like the right thing to do.
Setups for next week
We are well positioned in the Quant book now, there’s only one trade I’m seeing with a potential entry.
We got filled on our Gold short last week. It isn’t me calling the top in Gold, it’s simply a mean reversion trade using my Curvy mean reversion trading system.
The long S&P via $ES Futures went long at about 5300, currently 5710. This is a slow trend long trade and will look to add to our position as the system tells us to, adjusting for risk all along the way.
I was asked by a lot of people when I put this trade on and since, how I had the courage to buy it when the market was so bearish…
It wasn’t courage by any means. This was simply a textbook systematic trade, using exact risk management for entries, stop placement and position sizing.
If you are interested in the strategies that I use and go a lot deeper into building your own systems like this you can work with me on building out your trading business in the Trading Thunderdome (we’re starting a new cohort next week).
