Friday, May 4, 2012

Buy #2 if...

The system dials up a 2nd buy signal if SPY closes 137.20 or lower. I will add to my long position only if we close below that value. The system itself is already 100% long, so it has no chance to improve it's dollar cost average.

16 comments:

  1. Basic run of the mill buy or another strong buy?

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  2. What do you think about hedging with a TZA position at close in case there is more downside on Monday before a bounce?
    The elections this week-end could still cause more downside early next week.
    Heck, I didn't think we would get below 137.50, but that failed at 1130 this morning...

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  3. Why hedge? Why not simply sell some of your TNA (which would be the opposite of J's second buy recommendation, but if it lets you sleep better, that would be fine)?

    My recommendation, as always, is to simply follow the system.

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  4. J, how do you manage to pick a SPY number that the market loves to hover around...

    ;-)

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  5. No rush. The weak close argues for a very high probability that the market will open lower on Monday.

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  6. This may not be the best time to ask this of J, but I was wondering what the updated statistics for the system look like.

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  7. Rough guess about 16.5% YTD closed trades. Counting the open trade about 11% (SPX=about 9%)

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  8. Cool, they got it on sale here in A/H... buying some more.... below the LOD ... Gotta love this mkt...

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  9. This comment has been removed by the author.

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  10. Jaws57, I would guess a little less, but we'll let J do the hard math. And, to be fair, we shouldn't compare TNA to SPY. A more apt comparison would be to UPRO, which is up 29.34 ytd.

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    1. Very true... you need to compare comparably leveraged systems and, if you compare to buy-n-hold, you must include reinvested divies. So, if J is using TNA as his trading vehicle and then allows room to go full 2:1 leverage on some trades, the comparison should be to some 6x leveraged ETF, or , at least a 6-fold multiplier of a 1:1 ETF or index (like the Total Return SP500, which includes divies). For the record, as of Friday, the buy-n-hold person owning the Sp500, re-investing dividends is up roughly +9.61% YTD. So, if J stops at 100% TNA then 3xSp500TR = 28.83% return YTD is perhaps a better comparison. Best place to get the Sp500TR index information is here: www.bloomberg.com/quote/SPXT:IND/chart I'm not aware of a comparable divie-included index for the Russell 2k (which is what TNA is based upon). That would be the best comparison to J, since J trades TNA.

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  11. You'll have to excuse my lack of participation here Friday. We took the kids to Kings Island. I got home in time to see some attractive prices in A/H to make another large long purchase. I'm now about 80% long and if we gap down Monday I will not hesitate to go 100%. The half-stop isn't too far away now offering some protection should the market completely fall off a cliff. I'll have time this weekend to make a worthwhile post.

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  12. They had the Dow futs down -153 last night until about 3am... too bad they're rallying things now (only -80 now). Was hoping for a -150 or worse opening. Picked up some TNA (and shorted TZA) in premkt around 4:03am... Will keep adding, and tossing some worse-basis positions on pops until this mkt turns, which should be later this week.

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