64 replies to this topic

[Long/Short Funds]

Hey Charles,

Thanks so much for the update and an explanation of your investing methods. I am also retired (2000) and managing my IRA "somewhat" like you. I have not used IBD but have a charting indicator which produces red/white arrows for exit/entry points which seem to fall close to IBD.. I got the white arrow/buy signal yesterday also.

I use 10%/15% of total portfolio at risk on the short side with an exit signal and cover that when chart indicators reach the bottom green lines. When the lines are reached I switch this to the long funds as an early entry and then wait for the white arrow signal.. Not the best method by any means, but has done fair (except 2004 ) not so good a year.. Just hope this year is not another 2004....

Thanks again for the update and please keep us informed as I am very interested in seeing how close our signals are....

[tuffy88]

esther---Never hit the 7% fail safe stop. All three losses were with 5 distribution days within 4 weeks. Also the 5 profitable trades. They were taken out when the uptrend was ended by 5 distribution days. The 7% mental stop is a fail safe stop for the worst case scenario. So far has not happened. Charles

[tuffy88]

Trade update QQQQ's as of Friday were down 1.48% from the purchase price on 03/22/07 SPY's as of Friday were down 0.72% from purchase price on 03/22/07. Like to see the market move up after follow through day. And leading stocks break out of base. And no distribution days in first week of uptrend. None of that has happened.Not the way one would like to see an uptend begin, but there you are. Will exit trade on 4 or 5 distribution days or if price undercuts a main index for Day 1 of the rally attempt. About 12000 on the Dow Industrials. If we get a follow through day or leading stocks start breaking out from there bases will buy the other half of position I want in QQQQ & SPY. So that leaves me 60-40 Stock-Bond Index Funds. The second buy would make it 70-30. An exit would move the portfolio back to 50-50 to ride out any squal in the market. Just have to wait to see which way the market goes. I don't know and don't believe anyone else does either. As I posted once before on FF my purpose is to try to squeeze an extra 2% profit or so out of the portfolio. I think the equity premuim is about 2% or so over the 10 year treasury bond. Pretty low, but that is the judgement of Eugene Fama and most of the EMH people that I respect. I am trying to exract another 2% or so from the portfolio. It has worked for 4 years. Will see in the future. I know the traders here consider this analysis very Joe Sixpac and uninformed. But I am what I am. Lets see who is still standing at the end of the day. Charles

[voy]

Hi Charles - thanks for the post. - Joe

[tuffy88]

Yesterday was a big move up in price with heavier volume than day before. Nasdaq up 1.2% and regained its 50 day MA. S&P500 also up and regained its 50 day MA. Enough to be a 2nd confirmation day. IBD 100 lagged a little bit. Up 1% on heavier volume though. Enough for another confirmation day. Will buy the other half of my desired positions in QQQQ & SPY today. Futures off a bit this morning so will watch until they settle down to buy. Will post here when I do. This will bring my total (combined buy & hold investment & trading portfolio) portfolio to 70% stock index funds---30% bond index funds. Will hold that asset allocation until uptrend ends. Then back to 50-50 asset allocation. Uptrend will end when there are 5 distribution days within a 4 week period. Or when the low of Day 1 of rally attempt is undercut. About 12000 on the Dow Industrials. Will post when I get confirmation of new buys. Charles

[tuffy88]

Got confirmation on my buy's this morning. Bought 2nd half of position wanted in QQQQ's for $44.16 per share. Bought 2nd half of position wanted in SPY's for 143.53 My total asset allocation now 70% Stock Index Funds---30% Bond Index Funds. As I posted above will remain at that allocation until uptrend ends. That may be in 2 weeks or 2 years. I have no idea. Markets does not need permission to do anything from anyone's theory or chart. It sometimes seems to take delight in mocking all TA and FA. It does what it wants to do and will destroy anyone who puts money on any prediction based on anything. At least that is my take on it. Charles

[Long/Short Funds]

Thanks very much Charles for the update,,, shows great desicipline in investing.. I will be keeping a close eye on the post for future updates.....

[tuffy88]

Yesterday was another distribution day. #2 since the follow through day on March 21. Volume has been soft since the follow through day. Both up & down days. 3 accumulation days and 2 distribution days since the confirmation day on March 21. Institutions do not seem willing to buy with conviction. Or to sell with conviction either. So, for me, it is just a matter of waiting and watching until the markets (big institutional money, not in and out traders) decide what they are going to do. Action of the market in the short term makes little difference. What the final resolution will be I don't know. Don't think anyone else does either. Status of my trade as of 10 minuets ago. QQQQ(1st purchase) +0.58% QQQQ(2nd purchase)+0.54% SPY(1st purchase)+0.84% SPY(2nd purchase)+0.48% Trading Account as a whole +0.61% The trading account is about 20% of my total portfolio. Charles

[esther231]

Charles, I understand your definition of an acculmation day. Is there a similiar definition for a distribution day? What are you looking for to call a day a distribution day? Much thanks for your update. Esther

[tuffy88]

esther, A distribution day is a day when volume on a major index is up over the day before and price is down from the day before. The price decline, by IBD's thinking, must be at least - 0.2%(2/10th of 1%) to make that day be a distribution day. Again, by IBD'a thinking, it takes 4 or 5 distribution days to end an uptrend in the market. Putting the market in a downtrend. Charles