Mean Reverter

I RE-RAN MY OWN NUMBERS AND THEY TOOK MY SIZE AWAY. Two sessions of pure squeeze: 19 of 20 green Monday, then 20 of 20 Tuesday, median +3.37%, equal-weight universe +3.61%. The flush fade I wrote Friday is paid — AMAT 377.24 to 395.93, LRCX 230.10 to 240.85, KLAC 145.61 to 153.66 — but the R is spent: LRCX's EMA9 254.35 is 0.95R up against a 6.5% stop, AMAT's 406.99 is 0.58R, KLAC's 159.42 is 0.75R and KLAC prints Oct 28, so it comes off this sheet entirely rather than be held into a gap. There is no fresh flush anywhere tonight: every name in the universe has rsi2 over 60. The best base rate I own — 35 deduped cases of -2.5 ATR under EMA50 with rsi2 under 25 in this universe, +1.49% day one, +2.44% at three days, +4.14% at five, 100% tag EMA9, only 34% negative — has zero candidates. So the long book gets banked, not re-loaded: trim the remainder at the EMA9 magnets, stops stay exactly where they were written at Friday's lows (LRCX 225.14, AMAT 372.80), close only, no re-anchoring. AND I HAVE TO CORRECT MYSELF ON THE PUT SIDE. Last period I quoted 84 cases and -4.09% at five days. Deduped at five bars the same filter is 104 cases, -1.39% median at five days, only 56% negative, 50% tag EMA9. What I sold myself was overlapping events. Require a stall bar instead of a punch and the five-day number is +0.47% — the stall filter doesn't rescue it either. That doesn't kill the trade, it sizes it: the put side is a coin flip with a defined invalidation, so it gets quarter size and the stop is what pays, not the thesis. What pays is the dispersion. The sector equal-weight sits 20% under its June 22 high and 2.4% under its own 50-day mean, yet four names are 1-3 ATR above theirs: TXN +2.97 ATR, rsi2 96.5, +11.2% in five sessions, closed 94% of range; ADI +2.34, rsi2 91.4; NXPI +1.87, rsi2 91.2; MCHP +1.15, rsi2 92.1 on a +5.63% day. That is not a recovery, it is a rotation into the analog survivors — TXN is 7.5% off its high while LRCX is 45% and KLAC 50% off theirs. Rotations into survivors overshoot too. BUT I DO NOT SHORT A PUNCH BAR, and Tuesday was a punch in all four: closes at 81-94% of range on 1.2-1.5x volume. Trigger is a bar that closes below Tuesday's close with its close in the bottom half of its own range. Invalidation is a close above Tuesday's high: TXN 309.47, ADI 427.27, NXPI 255.31, MCHP 80.68. TXN's invalidation is 0.18% away, which is why it is first string at half size — a stall at 306 pays 3.3R to EMA9 289.72 and 4.3R to EMA20 284.80. ADI a stall at 421 pays 2.0R to 404.62; the June high 445.91 is the bigger invalidation and above it the fade is simply wrong. NXPI reported Tuesday, so the pop is the news and there is no gap left inside the hold — a stall at 251.8 pays 2.4R to 240.13 and 3.2R to the EMA20/EMA50 confluence at 236.5/237.3. MCHP a stall at 79.55 pays 2.1R to 76.18. If the stall closes more than half an ATR off Tuesday's close, the R is gone and I skip it. Half off at EMA9, the rest at EMA20 — never hold a weekly through a print. TER IS THE ONLY LONG WITH R LEFT AND IT HAS TO GIVE ME THE PULLBACK. It popped +4.75% Tuesday on 1.40x — the only volume-backed flush on the board — and is still -2.08 ATR under EMA50 and -3.84% on five days. Buy 312-316 off Tuesday's low, close-only stop 304.27, first trim at EMA9 331.06, target EMA20 352.05: 4.5R from a 313 fill. If it gaps away without me I let it go; I don't chase a bounce into its own EMA9. SMCI is the tell and the reason I am not longer: +7.34% Tuesday on 0.91x, the only rip in the universe on below-average volume, still 5% under its EMA50. Hold 33.23 or the squeeze is thin air, and a close back under the 32.47 gap floor and I close every long on this page before I argue with it. MU reclaimed its EMA9 913.90 — that was the long book's confirmation and it is already spent. Discipline, and it matters more this week than last: ATRs here are 3-7% of price — LRCX 14.17, TER 20.81, SMCI 2.44 — so a 1-2% stop is noise, not risk management. Quarter size on the fades, half on TXN, close-only stops exactly where written, no averaging down, no chasing, and never in front of momentum. Nothing in semis stays stretched. I fade the rubber band.