40 days ago, I wrote about how high-yield bonds can provide a useful buy/sell equities signal. At the time, one criticism I heard was that with the S&P 500 having such a sky-high valuation, time-tested signals might be late to react. I’m sorry to say that might be the case.
This is worth watching, it's from Ken Moraif, CEO and Founder of RPOA Advisors, he has about $4 billion under management. Watch from 1:57 to 8:49 the rest is self promotion.
thank you for this, they say a lot of things I didn't know. Talking about the 1950s, I remember how Kennedy ran on free trade and making America dynamic again, after the stodgy Eisenhower years.
(Of course, Biden was no Eisenhower, and MAGA is more like the opposite of JFK's mada...)
Of course, recent performance has got to be a lot better, since Uncle Warren has sold his Apple holdings and raised a lot of cash.
This ain't the first time I've seen this play out, by the way. I remember pretty well how in '99 folks were saying "Warren just doesn't get it", because he didn't partake in the Dotcom craze.
Then I asked: Thanks for the reply Jaewon! Can the 1 3 6 12 be replaced with other values i.e. 1 3 6 9 etc?
Reply: Such a customization is not possible. There are some variations of it available like 13612W or SMA12, though, and some other momentum indicators in general such as RSI, SMA, EMA, PPO, etc.
Historical results are great, but PV is still holding SPY decpite HYG is below the 100 day exp mov avg (EMA)! Is PV broke? Have you automated this strategy?
I emailed PV, but they never got back to me, and it's not the first time my emails are not answered, since PV was sold SRL Global :(
You're correct about stockcharts.com. Tradestation must be calculating the EMA a little different.
Is PV's setting: "trade at end of day price" practical in real life? When does PV update it's prices. If HYG closes below 100 EMA then I sell today or tomorrow at the close?
thank you for bringing this to my attention. Today, PV is still indicating that HYG is above its 200-day ema. I wrote to PV, requesting an explanation. I'll keep you posted!
"End of day" is not realistic. However, I also wouldn't sell at the next close, so as of yet, I refrained from using this rule for PV algos that trade daily as opposed to weekly or monthly. Why? Based on painful experience, market liquidity is not so good in the first and last 30 minutes of the stock market's time of operation.
In other words, neither EOD or NC are good rules for trading, so when writing about strategies, I just stick to EOD for comparison's sake. Do you think this is a bad idea? I'd appreciate your opinion.
I also tend to include "weekly" values to get a more realistic result, while knowing that timing luck will then have a larger role.
Sadly, it's not possible to program PV in such a way to include a "sell at next day 30 minutes after opening" rule, even though they have the minute-by-minute data. Since we are paying a lot for the use of PV, I think it's time to look at the alternatives. (The learning curve involved in switching is always painful, so I tend to procrastinate).
By the way, SPY as of yesterday violated your 5% rule according to the system I like to call "Sadek Bands".
I would LOVE to find an alternative to PV. Perhaps Learn the basics of Python and have AI write the code, but that’s a time investment! As I mentioned before, PV no longer bothers with replying to emails / suggestions.
In my experience, I cannot beat PV performance, but I can get close. I use discretion in placing my trades depending on market conditions, sometimes that works well, sometimes it does not.
For example, today I sold my SPY $519.48 position and bought BTAL $21.93, at 9:33 CST (one hour after market open).
BTW, you can find me on Discord under Bill Sadek or Billsadek
Please also take a look at Jaewon Jun's "quantmage.app". He has his own Substack and comments here sometimes. A guy with following!
On his Substack, he recently posted a list of alternatives to PV. A must-read, but I haven't gotten around to trying everything he describes. Times are difficult right now...
I wish I can send you a screen shot! You can email me at billsadek@gmail.com and I send it. Here’s the second-best thing, which is a "copy and paste" that shows PV actually switched to BTAL:
114 04/04/2025 04/04/2025 04/03/2025 Open Trade 100.00% 100.00% AGF U.S. Market Neutral Anti-Beta (BTAL) N/A N/A N/A N/A N/A N/A
Martin, more seriously, if you came from the position of considering bet size more important than the position, then these signals would be effective in telling you to reduce the size of your bet or position. When the daily volatility is high, as it is recently, using these long term signals in binary fashion seems to set you up for more whipsaw.
To mitigate whipsaws, I think Jaewoo Jun uses a rule that the threshold value must be reached on the market's close for two consecutive days.
Bill Sadek's MA bands system also looks useful. One would not sell at the 100-day MA, but 5% below that level. And one would not re-buy at the 100-day MA, but instead at 3% above that threshold.
I'm planning to hold 1% to 2% in bitcoin, just to have my foot in the door. I'm using ETF's IBIT and FBTC, both of which are very similar (Fidelity and Blackrock).
I will dollar cost average in or buy the dips and will aggressively take profit when it's ripping up; for now all subjective trades.
thanks! -- VWEHX is currently a bit above its 100-day MA.
Using it as a buy signal for SPY, OOM = BTAL, from 2012: CAGR 19.17%, maximum monthly drawdown -8.83%, worst year 1.38% (soon to be much worse, due to 2025).
At the risk of sounding repetitive, this was a really excellent article. SPY looks to close below its 10 month MA for this month so I think you’re wise to have gone to a large cash position (as did I). My final step will be to see the market’s reaction to “Liberation Day.” Good luck to us all.
This is worth watching, it's from Ken Moraif, CEO and Founder of RPOA Advisors, he has about $4 billion under management. Watch from 1:57 to 8:49 the rest is self promotion.
https://www.rpoa.com/trade-world-war/?utm_source=email&utm_medium=email&utm_campaign=email-market-alerts&utm_content=video
thank you for this, they say a lot of things I didn't know. Talking about the 1950s, I remember how Kennedy ran on free trade and making America dynamic again, after the stodgy Eisenhower years.
(Of course, Biden was no Eisenhower, and MAGA is more like the opposite of JFK's mada...)
This is better with BRK.B instead of SPY https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=5hHBOSK1WWhDcQMlFyCIaz
good catch, thank you Bill!
Of course, recent performance has got to be a lot better, since Uncle Warren has sold his Apple holdings and raised a lot of cash.
This ain't the first time I've seen this play out, by the way. I remember pretty well how in '99 folks were saying "Warren just doesn't get it", because he didn't partake in the Dotcom craze.
5-year comparison BRK/SPY
https://www.portfoliovisualizer.com/fund-performance?s=y&sl=4gIli9AQxg49FwU2jXcvs
Here's quantmage.app response to my inquirey if they can duplicate PV's Relative strength strategies (I did not ask about dual momenutum).
They said: Here is a similar strategy implemented in QuantMage. I used the 13612U momentum indicator (https://quantmage.app/library/reference/indicators/#13612u-momentum) there. You can try it yourself here:
https://quantmage.app/grimoire/afba7283f68b9878776b0ed3e4d6f11e
Then I asked: Thanks for the reply Jaewon! Can the 1 3 6 12 be replaced with other values i.e. 1 3 6 9 etc?
Reply: Such a customization is not possible. There are some variations of it available like 13612W or SMA12, though, and some other momentum indicators in general such as RSI, SMA, EMA, PPO, etc.
Hi Martin! You wrote an article about switching between SPY and BTAL. I liked the strategy and I put it in PV: https://www.portfoliovisualizer.com/tactical-asset-allocation-model?s=y&sl=4RHAV7eJieCAnimcT23EG7
Historical results are great, but PV is still holding SPY decpite HYG is below the 100 day exp mov avg (EMA)! Is PV broke? Have you automated this strategy?
I emailed PV, but they never got back to me, and it's not the first time my emails are not answered, since PV was sold SRL Global :(
Hi Bill, looking at Stockcharts.com, HYG as of today is below its 100 d ema, but yesterday was not yet. I expect it will show tomorrow.
Thanks for not socking it to me about how poorly this has recently performed, by the way...
You're correct about stockcharts.com. Tradestation must be calculating the EMA a little different.
Is PV's setting: "trade at end of day price" practical in real life? When does PV update it's prices. If HYG closes below 100 EMA then I sell today or tomorrow at the close?
thank you for bringing this to my attention. Today, PV is still indicating that HYG is above its 200-day ema. I wrote to PV, requesting an explanation. I'll keep you posted!
"End of day" is not realistic. However, I also wouldn't sell at the next close, so as of yet, I refrained from using this rule for PV algos that trade daily as opposed to weekly or monthly. Why? Based on painful experience, market liquidity is not so good in the first and last 30 minutes of the stock market's time of operation.
In other words, neither EOD or NC are good rules for trading, so when writing about strategies, I just stick to EOD for comparison's sake. Do you think this is a bad idea? I'd appreciate your opinion.
I also tend to include "weekly" values to get a more realistic result, while knowing that timing luck will then have a larger role.
Sadly, it's not possible to program PV in such a way to include a "sell at next day 30 minutes after opening" rule, even though they have the minute-by-minute data. Since we are paying a lot for the use of PV, I think it's time to look at the alternatives. (The learning curve involved in switching is always painful, so I tend to procrastinate).
By the way, SPY as of yesterday violated your 5% rule according to the system I like to call "Sadek Bands".
Here's another PV screwup: There was a signal to go to BTAL, which I copied and pasted in my trade log, and here it is:
3/14/2025 3/14/2025 3/13/2025 Signal 100.00% 100.00% AGF U.S. Market Neutral Anti-Beta (BTAL)
This trade does not even Show now in PV! Explain that!
I would LOVE to find an alternative to PV. Perhaps Learn the basics of Python and have AI write the code, but that’s a time investment! As I mentioned before, PV no longer bothers with replying to emails / suggestions.
In my experience, I cannot beat PV performance, but I can get close. I use discretion in placing my trades depending on market conditions, sometimes that works well, sometimes it does not.
For example, today I sold my SPY $519.48 position and bought BTAL $21.93, at 9:33 CST (one hour after market open).
BTW, you can find me on Discord under Bill Sadek or Billsadek
alternatives to PV:
testfol.io
curvo.eu
Possibly: finviz.com
I've only tried the first one. Learning curve...
Please also take a look at Jaewon Jun's "quantmage.app". He has his own Substack and comments here sometimes. A guy with following!
On his Substack, he recently posted a list of alternatives to PV. A must-read, but I haven't gotten around to trying everything he describes. Times are difficult right now...
I'll look into those and I sent an email inquery to: support@quantmage.app I'll copy you on the reply.
I wish I can send you a screen shot! You can email me at billsadek@gmail.com and I send it. Here’s the second-best thing, which is a "copy and paste" that shows PV actually switched to BTAL:
114 04/04/2025 04/04/2025 04/03/2025 Open Trade 100.00% 100.00% AGF U.S. Market Neutral Anti-Beta (BTAL) N/A N/A N/A N/A N/A N/A
Appreciate the shout-out, Martin!Enjoying your balanced view as usual!
Martin, more seriously, if you came from the position of considering bet size more important than the position, then these signals would be effective in telling you to reduce the size of your bet or position. When the daily volatility is high, as it is recently, using these long term signals in binary fashion seems to set you up for more whipsaw.
Agreed!
To mitigate whipsaws, I think Jaewoo Jun uses a rule that the threshold value must be reached on the market's close for two consecutive days.
Bill Sadek's MA bands system also looks useful. One would not sell at the 100-day MA, but 5% below that level. And one would not re-buy at the 100-day MA, but instead at 3% above that threshold.
I'm planning to hold 1% to 2% in bitcoin, just to have my foot in the door. I'm using ETF's IBIT and FBTC, both of which are very similar (Fidelity and Blackrock).
I will dollar cost average in or buy the dips and will aggressively take profit when it's ripping up; for now all subjective trades.
Do you have any strategies for Bitcoin?
Hi Bill, I use Bitcoin not as an asset, but as an indicator.
That said — have you considered using your own 200-dma +3%/-5% system for $BTCUSD?
(It would be a sell right now, according to that system).
An old saying: "The worst drawdown is always in the future!"
Try testing with: VWEHX Vanguard High-Yield Corporate Fund
thanks! -- VWEHX is currently a bit above its 100-day MA.
Using it as a buy signal for SPY, OOM = BTAL, from 2012: CAGR 19.17%, maximum monthly drawdown -8.83%, worst year 1.38% (soon to be much worse, due to 2025).
“having spoken on very good terms with my friends, the leaders of China and Europe, I have decided to postpone any new tariffs until 2026”.
Martin, do you have a friend in the White House? :-)
quite the opposite, it would seem…
At the risk of sounding repetitive, this was a really excellent article. SPY looks to close below its 10 month MA for this month so I think you’re wise to have gone to a large cash position (as did I). My final step will be to see the market’s reaction to “Liberation Day.” Good luck to us all.
thank you, Vance! Godspeed.