Monday, February 27, 2012

Hold confirmed.

Nothing new today, the system will remain on the sidelines. Thanks for all the participation and constructive comments this weekend.


  1. J, regarding the "all-in" money management:
    Since your signals are derived from SPX numbers, wouldn't it make sense for those seeking less leverage to trade SPY instead of IWM?

  2. Excellent question. The answer is a resounding No.

    The system is specifically designed to trade small caps. You could trade SPY, but I guarantee IWM will outperform consistently. Let's take a quick look at just this month using the signals/dates to the left.

    Trading TNA (100% position) results in a +29.09% gain this month.

    Trading IWM 100% results in +9.02%

    Trading SPY 100% results in a relatively poor +2.54%.

    You can see there is no contest. This is not an anomaly. It's like this every month. It simply doesn't make sense to trade SPY.


    1. I realize I looked at an extremely profitable month. During poor months, SPY vs IWM performance is a coin flip.

      So it makes sense to trade IWM to cash in when times are good.