SOXL Up Big

Our SOXL trade from Tuesday, 2/26/2013, was a huge success. We went against the majority at the time of the trade because it was at support and it paid off in a big way.

I did jump out of the trade late yesterday and got into SQQQ. It looked like SOXL was at resistance and the market was starting to reverse. As of right now, SQQQ is down a little over 1% and SOXL is up 1.5% so it's not looking good at the moment. I'll watch it closely and close the trade if it gets much worse.

Swimming Up River

Here we are just about halfway through the trading day. The markets opened strong before fading most of the morning. I was holding MIDZ since around lunch yesterday. It turned out to be a fabulous trade -- one of my better trades this year. I was down a little this morning but MIDZ broke to the green around mid-morning. I had a choice at this time, keep riding the trade and hope the market keeps fading or get out and get long.

I decided to get out and get long.

I sold MIDZ and got in SOXL. Shortly after MIDZ fell and SOXL went up. Then the tide turned once more and SOXL lost most of it's gains for the day. That puts us where we are right now, about 12:15pm ET.

Looking at the market trend today and over the past few days most people have decided we have hit a top and are going straight down. I'm not so sure -- at least in the short term. Many of the 3x ETF's I follow have hit support. If they can hold we should start to rebound and possibly see some 8% - 10% gains. The downside is we could fall through support and head down, quickly.

My SOXL trade is down slightly as I type this, but I feel the odds are in my favor with this trade. There's a much better chance we hold support rather than fall through it.

Win or lose, I'll post an update with the results in a day or two.

Stocks Above 50MA 7% Less Than One Day Ago

On 2/20/2013 we had a fairly decent down day. The number of stocks above their 50MA dropped over 7% from the previous day. I ran the following study to determine what happens if we buy at the close of the down day or in this case, 2/20/2013.
As you can see, 5 days is the honey spot. It's tough to buy on such bad days, but this shows that most of the these big down days are just shakeouts. It pays to go against the market when we experience these down days.

Buying at the close on the 20th and selling at the close on the 27th would be the latest trade for this study. I'll put out an update on the 27th to see how it did this time around.

First Study

I really like reading studies that some blogs do. I figured if that's what I like there should be a few others that also enjoy it. With that said, here's my first crack at it.

Filtering out the low price/low volume stocks out over 80% of stocks advanced on Friday. On Thursday, only 21% advanced and on Wednesday only 11% advanced.

Our first study will look at trades for stocks that advanced less than 15% 2 days ago, less than 25% one day ago and greater than 80% today. If the conditions are met we buy at the close and sell X days later. Looking at results from 1980 - today, here's what we have when trading the S&P 500.


As we can see holding for 4 days is our best trade racking up over $40,000 on 17 trades in a 100k account. This means buying at the close on Friday and selling on the 28th should be a good trade.

Ragdoll

We continue to get thrown around like a ragdoll. As mentioned before, these small up and down days are something the MTT is not good at. The MTT tries to catch the big moves in either direction. With that said, we'll continue to take the trades and sooner or later we'll catch that golden ticket.

We are long TQQQ from EOD on 2/12/2013. Let's see what today brings us. Since 12/31/2012 we are up 7.22% with most of that coming on the first of the year.

In my new trading system that I'm fine tuning, I'm currently in SOXL from 2/5. It's paid us 4.17% up to this point.