Another very nice article. I’m glad you looked at it, since I’m a big fan of QQQ. Since it’s Thanksgiving weekend, and there are a lot of distractions, I may have missed in the article if you looked at buying QQQ when SPY triggers the strategy.
Martin, Nice article for Thanksgiving Day here in the USA! It gives me something to contemplate after eating Turkey.
I think it's a great idea you've explored here. As you note, Nasdaq is more volatile, and your original approach is designed for the lower volatility S&P. Your also is a lot like a bandwidth filter where you mute the music when it's outside the filter range. With that in mind, maybe expanding your filter criteria for the Nasdaq would help cut down on # of buy/sells. For example, buy NDX when 6% above 200 DMA, sell when 10% below and use a six month quiet period. ..... I'll look after my turkey induced nap.
I am quite sure the strategy can be improved, and I'll certainly look into your suggestions.
That said, one of my points is that the strategy is *not* optimized and not data mined. I just took the 3% out of Bill Sadek's box, and the 200 dma ist just standard investing MO.
(In a similar vein, Andrew Thrasher just used some regular-joe metrics, and didn't try to improve them: 5%, two calendar weeks, two calendar months, 200-dma.)
Performance *might* be better if e.g. I used a 234-day moving average, or a 189-dma. But a non-optimized strategy is more robust in the long term.
In your article you mentioned: "Buy when the S&P 500 is 3% above its 200-day moving average."
This reminds me of a strategy I've followed in the last 15 years: Buy when the S&P is 3% above the 200 MA, sell when it's 5% below the 200 MA. This simple strategy still works today!
Oh my -- I should have named you as the source of the "3%-above" method! My apologies.
Actually, in previous posts, I did call it "the Sadek buy", or variations thereof.
I'll add a footnote to the article. And yes, your 3%/5% approach tests better for example than the Golden Cross, with slightly better CAGR, and a few less trades.
Another very nice article. I’m glad you looked at it, since I’m a big fan of QQQ. Since it’s Thanksgiving weekend, and there are a lot of distractions, I may have missed in the article if you looked at buying QQQ when SPY triggers the strategy.
Hi Vance, nice to hear from you again, thanks!
Nope, SPY plays no role in this one.
Rules:
*Sell QQQ when it gets a Confirmed Canary signal (or when I tell you that has happened).
*Buy QQQ after a waiting period of at least four months, when it gets a Sadek signal (= QQQ is 3% above its 200-day moving average).
*Re-sell QQQ after two months, if it is at that point not within Golden Cross territory
*During risk-off, buy TLT if TLT is within Golden Cross territory.
*Sell TLT whenever you buy QQQ
*Often re-read my recent post, "No Such Thing as a Sure Thing in Investing"
Unrelated to the topic, this is a pretty decent mutual fund: https://www.portfoliovisualizer.com/fund-performance?s=y&sl=7j7oN4xCu9BpyEzfNwMlbL
It needs a timer overlay, or incorporating it into a strategy.
Martin, Nice article for Thanksgiving Day here in the USA! It gives me something to contemplate after eating Turkey.
I think it's a great idea you've explored here. As you note, Nasdaq is more volatile, and your original approach is designed for the lower volatility S&P. Your also is a lot like a bandwidth filter where you mute the music when it's outside the filter range. With that in mind, maybe expanding your filter criteria for the Nasdaq would help cut down on # of buy/sells. For example, buy NDX when 6% above 200 DMA, sell when 10% below and use a six month quiet period. ..... I'll look after my turkey induced nap.
Again, nice work here, for thought.
excellent ideas, Dartz!
I am quite sure the strategy can be improved, and I'll certainly look into your suggestions.
That said, one of my points is that the strategy is *not* optimized and not data mined. I just took the 3% out of Bill Sadek's box, and the 200 dma ist just standard investing MO.
(In a similar vein, Andrew Thrasher just used some regular-joe metrics, and didn't try to improve them: 5%, two calendar weeks, two calendar months, 200-dma.)
Performance *might* be better if e.g. I used a 234-day moving average, or a 189-dma. But a non-optimized strategy is more robust in the long term.
In your article you mentioned: "Buy when the S&P 500 is 3% above its 200-day moving average."
This reminds me of a strategy I've followed in the last 15 years: Buy when the S&P is 3% above the 200 MA, sell when it's 5% below the 200 MA. This simple strategy still works today!
Oh my -- I should have named you as the source of the "3%-above" method! My apologies.
Actually, in previous posts, I did call it "the Sadek buy", or variations thereof.
I'll add a footnote to the article. And yes, your 3%/5% approach tests better for example than the Golden Cross, with slightly better CAGR, and a few less trades.