August 2025 - INDL position

 Date of Entry: August 2025

Ticker / Instrument: INDL – Direxion Daily India Bull 2x Shares (leveraged ETF)

Trade Type: Long position (shares)

Reason for Entry:
I entered this position after observing oversold technical conditions on the weekly chart. The Commodity Channel Index (CCI) had descended toward the –100 threshold, which historically suggests the asset is nearing an oversold zone. Momentum to the downside appeared to have stalled, with the CCI moving sideways rather than continuing its decline, signaling a potential shift toward stabilization or reversal.

Macro / News Backdrop:
This trade is being taken against a challenging macro environment for Indian equities:

• Tariff Escalation: On August 6, 2025, President Donald Trump announced an additional 25% tariff on Indian goods, raising the total rate to 50%. 

Risk Management:
Due to the negative trade news and potential for further geopolitical escalation, I am implementing a tight stop loss at –10%. The position is small and speculative, targeting a potential technical rebound rather than a long-term macro trend.

Goal / Exit Plan:

• Primary Exit: Profit target based on a bounce from oversold levels toward the mid-range of recent trading.

• Stop Loss: Immediate exit if price declines 10% from entry, to limit downside exposure in the event tariffs continue to pressure Indian equities.

Notes:
Will monitor:

• Technical behavior around the –100 CCI level.

• Any signs of reversal on the weekly chart (CCI crossing upward).

• 
  Developments in U.S.–India trade negotiations or changes in tariff policy.

• Broader emerging market sentiment, as INDL could be influenced by shifts in global risk appetite.

August Trading Notes (TQQQ – LEAP Puts)

Ticker / Instrument: TQQQ – LEAP Puts

Trade Type: Long-term bearish position (LEAP Puts)

Rationale:
I initiated this trade because TQQQ appeared overbought and technically due for a pullback. On the weekly chart, the Commodity Channel Index (CCI) had been trending down and crossed below the +100 threshold, signaling a possible trend reversal from bullish to neutral/bearish. See Figure Below:

From a macro/valuation perspective, multiple long-term valuation measures suggested the broader market is expensive:

• Buffett Indicator – at elevated levels, historically associated with overvaluation.

• CAPE Ratio – well above historical norms.

• Price-to-Sales Ratio – stretched compared to long-term averages.

• S&P 500 Mean Reversion Models – indicating limited upside from current price levels.

That said, two factors tempered the bearish case:

• Earnings Yield Gap – still suggests the market is fairly valued relative to bonds.

• Market Sentiment – currently neutral, not overly euphoric or fearful.

Position Size & Risk Management:
Position sized small to moderate (10 % of my account), acknowledging the risk that valuation extremes can persist. This trade is intended as a longer-term hedge against potential market weakness, rather than a short-term speculative investment.

Goal / Exit Plan:
Will sell into strength starting at a 50% percent return.  Some of the positions will be stopped out if their price drops 20% or the CCI reclaims +120 on the weekly chart. Additionally, all PUTs will be sold if the price drops 30%.  I will reconsider more PUTs, even if stoppped out, if the CCI resupports a bearish thesis.

Notes:
Will closely monitor macroeconomic data releases and shifts in sentiment. Will also watch for confirmation in correlated ETFs (e.g., QQQ, QLD) and broader indices (e.g., NASDAQ-100, S&P 500).