After watching the names during this 'rebound', and their lack of strength, I've decided to pare back my exposure to this space. I am cutting my CME Group exposure by 75%. This was the 8th largest position in the fund, and 5th largest long position. This is a pure technical call, as the fundamentals appear (on the surface) intact, but another case where I don't want to argue with the market. The market is saying 'not very interested' to these names, so I am not going to argue in the near term. I will try to buy back (some) lower; closer to $500-$510 which is about 7% down from here, and the lows for the stock in May and (for 1 day) in August. I am not sure if this weakness is a signal that the 'smart money' things volumes in derivatives will be dropping (less hedge funds to trade as they cut back on risk or go out of business?), or just a call on valuation but I am going to head for the hills for now and re-assess later.
Technically, the 50 day moving average is $555, and the 200 day moving average is $547. In none of the days this week during this 'rally', did the stock price even attempt to test the 50 day moving average... in fact the stock is now struggling with $550. As the stock closed below the 200 day moving average 2 of the past 3 sessions, and my macro negative view on the market near term as a whole, I am cutting. Again, if I am wrong, and the market turns I can rebuy back somewhere in the $560s - I give up 3-4% gains but the technical picture would be 'safer'.
Note: the chart below shows a lower 200 day moving average ($536) than the charting I use does....
Long CME Group, Intercontinental Exchange in fund; no personal positions
