JTH's Account Talk

[JTH]

Off Thursday's Close we moved from Slot-2 down to Slot-5 due to a logic flip in Breadth Sync.
Of the 85 moves into Slot-5, 25 were for 1 session, and Slot-5 take's up the bulk, nearly 40% of all 1-sessions slots.
Probabilities, favor the next transition will be back into Slot-2

 

[JTH]

In late 2024 some of my statistical studies concluded 2026 was going to be a tough year. Problem is I can't remember why, but I'm sure some of it had to do with the 2nd Year of the Presidential Cycle.

But for 2026 we have 2 basic choices, either you think the economy is tanking or the the loose regulations will unleash the Kraken.

Then some folks might guesstimate, since we've had 3-Solid years of gains, it's time to take profits.
I wonder what they thought back in the mid 90s.

• 1995 gained 33.56%
• 1996 gained 20.26%
• 1997 gained 31.01%
• 1998 gained 26.67%
• 1999 gained 19.53%

The 1962-2024 Historical Average Chart is impressive.

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On the SVS Chart, Sync has realigned, and as was expected, the 5-Sessions in Slot-5 shifted back up to Slot-2.
On the Micro Stats, we can see the Sync-Alignment is in the Mid-40% (the mushy middle) so while we are in Slot-2, it's on the lower end of the range, meaning the weakest, but also still has a good bullish statistics.

This is our 4th sequential Slot-5 to Slot-2 transition over the past 44 sessions, and with the Uptrend in the Top-20%, I expect we'll fluctuate here until Volatility gains or loses traction.

 

[JTH]

The Santa Claus rally officially starts near December 21st, but on average the lows in December are made closer to the 15th. That's on average, not every year as we have had some poor December in the last decade.

After reading Tom's Blog, I thought I'd crank out a Monthly High/Low Chart for December, since I was curious and thought it may prove useful as I close out some positions early next year. With only 20 years in my current dataset, it would be unfair to target just one Top & Bottom session, so I went for a Top & Bottom 3 to average it out and also look for clusters.

Some AI-Derived highlights using 2025 Context: Based on those first 11 December sessions (TRD 1–11), 2025 looks like a failed early push into new highs, followed by distribution, but with strong support. Early-month high already set: the period high is 6903.46 (Dec 11), then you get a sharp reversal Dec 12 (-1.07%) and weak follow-through Dec 15 (-0.16%).

December 2025 is range-bound with a bearish rejection near ~6900, but not broken while ~6800 holds. If it can’t reclaim and hold the upper band (roughly 6865–6900), odds tilt toward more chop or a downside flush. If 6800 breaks cleanly, the “mid-month low window” the heatmap hints at becomes the higher-probability path.

Historical Context excluding 2025:

• The first 5-7 trading days account for a disproportionate share of monthly highs.
• Lows cluster more often in the mid-to-late window (roughly TRD 10-18).
• Very few lows occur in the final sessions of December.
• TRD 8-15 is where Highs are still possible & Lows accelerate

 

[JTH]

While the S&P 500 is at the bottom of it's 3-Week Price Range, the Mid-90 and Bott-403 are in the middle.

Is it breadth rotation? It does look like the Mega Large Caps are taking profits as we finish the year.

Another notable event, while the Index lost -1.16% off Wednesday's session, the number of it's stocks above the 50-MA rose from 56 to 58.

 

[JTH]

Our 6-Sessions in Slot-2 have thus far been a flop, with a -1.63% loss. At present this is the worst I've seen Slot-2 perform for this duration.
Historically 6 or more sessions in Slot-2 has a 81% win ratio with 1.68% avg return, and this includes out current slot metrics with the -1.63% loss.

Sync-Alignment has dropped into the Mid-40%, it's close to flipping over into a diverged condition.
I suspect another weak session will drop us back into Slot-5, which at present is more reflective of our current situation.



The key here, is that Volatility has been Moderate & Stable since 13 Oct. This is in the lower end of the the Middle 40%, meaning we can ride inside this range for some time. When it comes to Volatility, lower has a better win ratio, and more stable returns. The Mid-40% is what I call the mushy middle, and it's very close to the baseline benchmark.

 

[JTH]

The Uptrend has dropped from the Top 20% to the Mid 40%, but we are still in the upper 3rd of the 4,750-Session range.
While Friday was a gainer, it wasn't enough to offset the loss of Breadth, and as expected we dropped back down into Slot-5.

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Our last SPX All Time High was 29-Oct, this places us in a 36-Session 5.75% range. In contrast SPX-Equal Weighted made a recent All Time High on 12 Dec. So basically leadership peaked earlier, and now we are broadening the internals.

From here we might be looking at two outcomes, Re-Acceleration vs. Distribution

• New leaders emerge vs. Leadership fails to rotate
• Equal-weight holds above its breakout vs. Equal-weight rolls over after cap-weight
• Breadth stabilizes or improves vs. Breadth weakens across tiers
• Cap-weight retests or exceeds prior highs vs. Index stalls, then contraction begins
  
  

 

[JTH]

I've mentioned before, this is not a trading system this is what I call Conditional Modeling, telling us where we sit inside the hierarchy of price structure. This is a rolling 4,750 session model where every new session adds 1 and removes 1, thus stats evolve as we move forward.

Slot-5 shifted up into Slot-2, then shifted down into Slot-3.

This was caused by Volatility shifting down from Moderate into Muted. When Volatility is Muted it generally implies win ratios will be above benchmark while both gains and losses will be smaller in size, this also fits into the traditional Holiday profile of late December. However, since we are in the high upper limits of the Muted range, I expect we'll fluctuate until getting settled into a longer routine.

 

[JTH]

IFT 20G 80C

Going to start the year off working around this position, it's more reflective of how I manage risk. It would be nice to put some of those G-Fund pennies to work on the next dip.