Joy for S investors as it performed better than the broader market
13 Dec, 201813 min read
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SPRINT CORP outperformed today. It surged by +0.5% to close at 6.07. It's recent 5 day performance has been +1.68%, +0.17%, -1.33%, -1.96% and -0.49%.
S is currently in a bearish trend. The previous short signal in S has not been profitable for investors in general. If you are short on S at current levels please make sure that your allocation is limited and that your portfolio is well diversified.
S has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 20 Jan, 2016 to 26 Jan, 2017. Over the last 2 years 11 months and 9 days, S outperformed the SP500 index on 48% days. Which indicates that on days S outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.
S returned losses on 62% days in the last three months. During this time, it delivered on average -0.05% per day. It delivered it's best daily return of +7.75%, during this period, on Wednesday, 31 Oct, 2018. The longest stort-term trend during this period was 7 losing days, which started on 29 Nov, 2018 and ended on 10 Dec, 2018. This bearish trend lost -6.79% of investor capital.
During the last year S had 5 profitable months and 7 loss making months. S returned profits in fewer months than SP500 index. S significantly outperformed SP500 index in Apr 2018, when it returned +15.67% compared to +4.75% returned by SP500 index during it's best month in the last one year - Jan 2018. S had a shorter streak of profitable months than SP500 index. It only went up in 4 straight months during the last year.
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
S is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in S's volatility from 17 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 14 Sep, 2018 to 29 Oct, 2018.
Advanced/professional short-term investors should note that S has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.
Investors trading in S derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.
SP500 index has more chance of extreme outcomes than S. Therefore, SP500 must receive a lower allocation than S in your portfolio. SP500 index usually has shorter drawdown period than S.
On a general note (since you are interested in S), two mid cap instruments that deserve special mention are SQ and TWTR. They have significantly outperformed the overall market.
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