The reason I HAD to sell these positions is that the Portfolio was only long at the start of Friday, since one day earlier I had closed my lone short position. If I had kept that AGCO short, then the portfolio would have managed better and I could have kept one of the two long positions in order to maintain a neutral mode for today.
Why is a neutral mode important for today? Because the portfolio stock selection looks at the best and worst stocks in terms of price/sectors relative strength and money accumulation. This means that we want to buy stocks that have been up the most and short the stocks that have been down the most. The Buy/Short zones are defined as a pull-back around the 5MA for long trades and a bounce to the 5MA for short trades.
This method works well in a trend following environment. However, on Friday, the -2.09 S&P500 drop was very steep and meant that most of the "momentum" stocks reversed harder to their mean price and hence moved more than 4% to the downside, whereas some beaten-down retail-related stocks almost bounced or suffered minor losses.
Today could be a snap-back, or a hard continuation to the downside. It is very difficult to hold to short-term positions in such conditions, especially with tight stops.
Today's list only includes two possible long positions: GBX and LOCK.
Note that the stops are larger than the 5% limit. This means that positions must be smaller than usual.
Out of the Portfolio, I had a long LOCK position that I sold on Friday. Not sure I want to re-enter, as the LEV looks weak. GBX is interesting, because it is pulling back just into its break-out range.