And when one third of the S&P 500 is riding that bus, the index can’t exactly step on the gas.
This sideways action frustrates trend followers while creating fertile ground for mean reversion trades.
It’s more fun to buy breakouts. But I’m already long the areas that are trending, and to be frank, they’re a bit extended.
So instead of forcing additional exposure into stretched trends, I’m looking at the lagging area through a different lens.
Think about it.
If the market is stuck in a range, and the largest components of the index are stuck in that same range, then buying near the lower end with clearly defined risk just makes sense.
And that’s exactly what we have in $MAGS.
Price is sitting near the bottom of its range. Multiple AVWAP levels are stacked in the same area.
