June’s been sprinkled with a few too many of these sharp risk on rallies for our taste. When our screens turned neon green at the beginning of the month, we worried that this was the June snap-back we had hoped to avoid. Fortunately, the month contained plenty of give and take, and many of the short positions in our hypothetical trend following model remained open for most of the month. Today’s rally has brought even more of the short positions from our hypothetical trend following model close to their 100-day moving averages, the point at which the trades will be stopped out.  It’s not difficult to see why, when our Finviz screen is lighting up like a Christmas display that’s lost most of its red lights:

Disclaimer: past performance is not necessarily indicative of future results.

Should this rally hold through the end of the day, our trend following model will be starting July in a precarious position, with several trades just a short rally away from being stopped out for a loss. In the end, it was not quite the June we were looking for, but not quite as bad as we’d feared. Half of the year is now ink in the books, but we haven’t lost hope yet. With most of the short positions in our trend following model still open, a big downturn in July would still be welcome for trend followers.