A rougher way to beat a falling market

The week at a glance

SPY dropped 1.97% this week. We made 3.48%. That's a 5.45-point swing in our favor — and I'd be lying if I said the week felt that clean from the inside. Here's the honest version: the Relative Strength Engine carried us. TEAM has been our anchor trade since early September — three positions now, all open, all showing double-digit gains. The oldest of those, opened September 9th at $179.86, is sitting at +15.55%. HURN, entered September 29th at $158.90, is up 10.04%. Those two names did the heavy lifting while other parts of the book were getting dinged. On the other side, HTFL is a problem. We're carrying three open positions — entries at $50.49, $50.70, and $50.35 — all negative, ranging from -4.09% to -4.75%. None have hit their stops yet, but they're drifting the wrong way. ASST did hit its stop on October 14th. We entered at $28.99 and exited at $26.00 for a -4.83% loss. That one stings a little, because the setup looked fine — the market just disagreed. RNG is another drag. Two positions, both open, both down: -2.56% and -3.13%. Still within range, but we're watching them closely. Then there's CRNX. Fourteen open positions, all entered between August 5th and August 31st, all showing gains clustered in a tight band — from +1.22% on the high end down to -0.05% on the oldest. The Relative Strength Engine kept adding to CRNX through August, and the positions are holding. But capital parked in a flat trade carries its own quiet cost. Net-net: the week worked because our winners are running and our losers haven't broken stop yet. That's a fine week. It's also a fragile one.

Trades we closed this week

One closed trade to talk about: ASST. The Relative Strength Engine flagged ASST on October 9th at $28.99. Five days later, on October 14th, it exited at $26.00 — a loss of 4.83%. Alpha relative to SPY came in at -4.76%, which tells you SPY barely moved during that window. This wasn't a market headwind we can point to. It was a stock-specific loss, plain and simple. The stop worked exactly as designed. We didn't hold through hope. The position violated the level, the system exited, we moved on. That's the job. What's worth noting about ASST is that it's one of the cleaner examples of the system doing exactly what it should during a losing trade — no hesitation, no averaging down, no 'let's give it a few more days.' The discipline is the point. Losses are part of the edge; the question is always whether they're controlled losses or chaotic ones. This one was controlled. Everything else on the closed-trade side is still open, which means we're carrying unrealized P&L pulling in both directions. TEAM and HURN are the bright spots. HTFL and RNG are the ones we're keeping a close eye on heading into next week.

What we tuned this week

No major parameter changes this week. The Relative Strength Engine ran as-is. What we did do was skip three signals. The system flagged setups on three separate days and we passed — those go into the watchlist count, not the trade count. That's a judgment call the system allows for, and it's worth naming. We're not going to force entries when conditions feel off, even if the signal is technically there. Current open position count is 23. That's a lot. We're not adding indiscriminately. If HTFL or RNG deteriorates further, the stops handle it. If they stabilize, we watch. Day 75 of the experiment. Cumulative alpha sits at +3.48% over SPY since day one. Win rate is 0% on 24 closed trades — every single closed trade has been a stop-out so far. The open book is where the gains live. That asymmetry is intentional: let winners run, cut losers fast. But it also means the win-rate number looks brutal without context. Context matters here.

What we're cautious about next week

HTFL is our loudest near-term concern. Three positions, all negative, entries clustered tightly between $50.35 and $50.70. If the stock keeps sliding, we could be looking at three stop-outs in quick succession — and that would hurt the weekly number in a hurry. RNG is quieter but in the same category. Two positions sitting at -2.56% and -3.13%, neither recovering nor breaking. One bad week for RNG and we're dealing with two more exits. The broader market backdrop feels shaky. SPY down almost 2% in a single week is worth paying attention to. Relative strength strategies can keep working in weak markets — that's the whole idea — but if SPY breaks down further, some of our open names could get dragged along with it. TEAM and HURN have been holding up well, but they're not immune. And then there's CRNX — fourteen positions, all small, all flat-ish. Individually, each one is manageable. Together, if something macro hits and CRNX sells off, fourteen small losses add up fast. That's a concentration risk we're aware of and watching.

Looking ahead to Monday

The week that looked good on paper had real tension running underneath it. TEAM is doing what we hoped. HTFL is doing what we feared. ASST stopped out clean. And we're heading into next week carrying 23 open positions with a skittish market at our backs. If the winners keep running and the stops hold, this stays interesting. If HTFL and RNG crack at the same moment SPY has another rough week — well, that's the test we've been waiting 75 days to see.