Today’s update covers the recent mean-reversion setups. Stocks advanced in the first half of January and setups do not materialize with strength. The sharp pullback over the last two days pushed some ETFs into oversold territory for mean-reversion
This is part 2 of the mean-reversion strategy for trading ETFs. We covered the indicators, setups and signals in part 1. Part 2 will show some trade examples, backtest results and performance charts. Backtest results help us set expectations going forward and prepare for adverse reactions, which will happen.
Today’s report will dive into monthly seasonal patterns using benchmark metrics and equity curves. The stock market has a long-term bullish bias and the monthly return metrics reflect this positive bias.
This report will introduce the criteria, indicators and signals for a mean-reversion strategy that trades ETFs. The strategy buys after excessive declines and sells after the first bounce. Buy the dip and sell the rip. This is a very picky
Today’s report will update the Trend-Momo Bull-Bear ETF Strategy that trades the All Weather ETFs. 2022 has been a rough year and there are still two weeks left. The Composite Breadth Model turned positive on November 30th and this means stock-based ETFs became eligible for the strategy.
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This report will update the Composite Breadth Model signals and compare signals to the 5/200 cross for the S&P 500. The CBM outperforms this cross and does so with few positions (whipsaws). The CBM also performs in
The previous article explained the methodology behind the Trend-Momo Bull-Bear ETF Strategy with signal and ranking table examples. This article will update performance by showing the equity curve relative to buy-and-hold, putting the June drawdown
This is an update to the Trend-Momentum strategy that trades the All Weather ETF List. First introduced in February 2022, this strategy benefits from bull markets by focusing on stock-based ETFs when the Composite Breadth Model turns
Today’s article is the eighth installment of the Trend Composite strategy. Last week we looked at ATR Trailing Stops and time-based exits, but these did not add much value. Today we will add various profit targets based on percentage gains. The strategy will still sell when/if the Trend
The Composite Breadth Model turned bullish on Friday and this means the Market Regime is bullish. This also means the Trend Composite strategy outlined in part five can now choose trend-momentum signals in stock-related ETFs. Please review part five for details on this strategy.
Today’s article is the sixth installment of the Trend Composite strategy. We will take the strategy a step further by adding an ATR Trailing Stop and a time exit based on the number of bars in the trade. Time exits are similar to, but not exactly the same as, rebalancing.
Today’s article is the fifth installment of the Trend Composite strategy. The series was put on hold because of recent events and market volatility, but continues today and will complete before the end of the month. Today’s installment uses the highly curated All Weather ETF List, which covers most assets and has minimal overlap.
Today’s article is the fourth installment in the Trend Composite series. We started with an introduction to the Trend Composite, tested uptrend/downtrend signals and then moved to portfolio level testing using StochClose as the tiebreak. Today we focus more on StochClose rank by using
Today’s article is the third installment of the Trend Composite series, which is working towards a trend-momentum strategy for trading ETFs. Today we will move from “All Signals” testing to portfolio level testing. We will first use uptrend/downtrend signals
Today we put the individual trend-following indicators in the Trend Composite to the test and compare performance against the Trend Composite itself. These are “All Signals” tests that give us an idea of trade frequency (number of trades), Win Rate, Average Gain and Average Loss. We will also look at three other performance
This is the first article in a new strategy series that will extend over the next several weeks. We will start by defining the Trend Composite indicator and then work our way towards a systematic trading strategy. The strategy is based on signals from the Trend Composite.
In an ideal world, trends would be consistent and persist for months. An ideal uptrend would march higher by consistently recording higher highs and higher lows. Once reversed, a downtrend would take over and work its way lower with lower lows and lower highs. There are plenty of chart examples for these consistence and persistent trends.
While there are too many influences to list in one post, this commentary features a dozen books that helped me over the years. These books cover technical analysis, trend-momentum strategies, insights from great traders and the mindset required to stay in the game.
This article will dive into trend following. We will start by going over some key assumptions and expectations to consider when implementing a trend-following strategy. What are realistic Win Rates and Profit/Loss ratios? Attention then turns to selecting a timeframe suitable to trend-following. I will then explain 10 trend-following indicators
The turn of the month shows a strong bullish bias with an extremely stable equity curve that really took off the last few years. This strategy, which is only invested 38% of the time, outperformed buy and hold with a higher Compound Annual Return. Overall, the eight day percentage change at the turn of the month is positive 68% of the time for SPY. Despite strong numbers overall, February is weakest month when testing over the last twenty years, and we just happen to be in February.