Market thoughts:
Equity Markets have enjoyed another robust month with the Dow, S&P 500 and Nasdaq Composite putting up +1.83%, +1.64% and +2.31% performances respectively.
As per last month, my perspective remains that there is enough to be concerned about with regards to the US economy and Markets over the medium term. However, despite the geopolitical and macroeconomic uncertainty, markets have exhibited remarkable resilience. This is notable.
I am not a fan of large Tariffs. My belief is if they proceed as intended by the Administration my belief is this will hurt the average American and SMB. However, on the tariff front there has been progress with the announced Trade deal with Japan and the EU. A deal with China remains.
In June we did get another inflationary print with regards to the PCE (Feds preferred metric). Core PCE printed at 2.8% (YOY) and 0.3% MOM. Last month when we heard from Chairman Powell he had stated that he “expects policymakers to stay on hold until they have a better handle on the impact tariffs will have on prices”.
At Jackson Hole, Chairman Powell acknowledged the complexities of the current economic landscape, noting that "risks to inflation are tilted to the upside, and risks to employment to the downside." Remember also that previous PCE numbers were revised up and Employment numbers were revised down. With regards to GDP, yesterday the US revised Q2 GDP growth up to 3.3%. Despite all this, most participants (and prediction markets) are expecting a cut in September. I believe this is now likely and if in fact inflation is transitory, it would be the right move.
Last month, I suggested that things could be changing after the recent market run, given that institutions have much more significant exposure and seasonality no longer favours the bulls. Although we had a bit of weakness at the beginning of August markets have continued to grind higher. I have started to shift my portfolio slowly away from what’s been working to what I expect to work in some months from now. More on that later in this update.
Format for the rest of the update is as follows:
Indices Review
Key Indicators
SixSigmaCapital Swing trades Recap
SixSigmaCapital Performance: YTD and since Inception
Current Positions in size order
Portfolio changes in the last month
Watchlist and Favourite set-ups over next few months
Closing Thoughts
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Indices:
S&P 500:
Currently trades at 6,501.86 (10.79% YTD)
It is 3.1% above the 50SMA. RSI is 64.6.
Trading at 24.9x trailing earnings and 23.71x forward earnings (per WSJ)
Nasdaq Composite:
Currently trades at 21,705.16 (12.57% YTD)
It is 3.93% above the 50SMA. RSI is 63.28.
Trading at 32.61x trailing earnings and 28.97x forward (per WSJ)
Key Indicators:
10 Year T-Note: 4.207%. Now -8.04% YTD. It has decreased by 4.47% in the last month.
CPC (Put to Call Ratio) is subdued at 0.88. >1 can indicate Fear and >1.5 can be Extreme.
Vix: Is 14.43(!). That is in the lower range of where we have been in the last 6M. Note that in April we did get a >60 print. I have included a chart below showing the Vix over time and Nasdaq Comp underneath it: you can see extreme readings always have been a buying opportunity in medium term.
British Pound vs USD: 1.351 and up 9.26% YTD! $ has weakened significantly YTD.
Fear and Greed Index currently reads 66 which is in the ‘Greed’ zone.
NAAIM Exposure Index is 92.94! (was in low 30’s in April)
SixSigmaCapital Swing trades in the last Month:
August has been an active month having partaken in a several opportunistic swing trades plus some portfolio changes (discussed further below)
The new ETH $2.4k purchases were sold at 4.75-4.8K to book the ~100% gain.
Added $ETH at 4150 on the 19th of August and sold 3 days later for 16% gains.
Picked up UNH 1st of August at ~240, booked some gains on the position at $308 on the 15th of August for +29%
Entered NVO at 45.5 on 6th August, now >56
Traded around a core on HROW, added heavily at 29.95 on the 12th August and sold for a +25% gain on the 13th
Traded BMNR from 38 to ~52 for +36% in 11 days.
Exited my CRCL position at 162.75 for a ~3% loss ahead of ER as no cushion.
Have other swing trades open (discussed below)
Performance: YTD and since Inception of SixSigmaCapital (Equities Only)
2023: +94%
2024: +61%
2025: +43.15% YTD (As of Thursday 28th August Market close)
TWR since Inception of SixSigmaCapital is thus 347.1% or a 4.471x of the portfolio. The CAGR is ~65%.
TWR of S&P 500 in the same period is +76% or a 1.76x return.
SixSigmaCapital has achieved a +271% outperformance in that time period.
Equity curve since switching to my current brokerage in the last few years is below:
Current Positions in Size Order with Cost Basis: