A BREAKTHROUGH AND AN OPPORTUNITY
For over 10 years we
had a successful Sector Proxy Trading program, but
it was based on the government CFTC reports of large
traders activities during the week in trading
Futures and Options. We discontinued this several
years ago because those large traders have shifted
their trading strategies to trading Exchange Traded
Funds. You can
look at volumes on the popular ETFs and see that
they trade huge volumes every day (The SPY trades
300 MILLION SHARES a day).
This is the playground where the big boys play, but
an even more profitable vehicle exists in the Ultra
Long and Ultra Short ETF proxies. Using these
vehicles you don't have to "go short" when you think
a sector is going down....You can simply BUY the
As an example, if you were going long the SPY or its
underlying SPX Index, you would instead BUY the SSO
which is the double long proxy. Their market goal is
to mimic the action of the rising index, but pay 2
TIMES the percentage gain of the underlying index.
Where it gets exciting is that if you think the
Index is going to go down, you can BUY a different
ETF, the SDS and its goal is to deliver 2TIMES the
drop of the SP500 that day.
Those who are adverse or confused by shorting (or
think its un-American), can simply buy this ETF like
a share of stock for the same low commission. You
don't have to wait to the end of the day to see the
settlement price, it trades up and down in response
to the market all day long. No restrictions, like
Mutual Funds and NO LOAD FEES. You can exit or even
reverse your position on a moment's notice and these
ETFs are liquid enough you don't get stung with huge
SO WHAT'S THE DIFFERENCE BETWEEN THIS AND OTHER ETF
We have spent the last two years looking at
everything that is out there and comparing it to our
approach which is quite different.
Everybody looks at the underlying indices like the
commonly available SPY daily data, including price
and volume. The SPY (SPX Index Proxy) is a weighted
index. In other words, the price and volume are tied
to the biggest capitalized issues, not the overall
direction of the individual components. If you have
the top Stock in the index going up for the day, the
odds are that the index will reflect it, even though
the majority of stocks are all showing decreasing
support in terms of Price and Volume.
We have long held that this is an error, and two
years of studies have shown us that we must look at
all of the components of each ETF and determine the
percentage of stocks making positive moves and
attributing their individual volumes into our
formulas. This gives a true picture of underlying
THEN we look at the proxies that return 2X the
direction change of the underlying ETF and recommend
these as the trading vehicles to double your gains.
There are 3x shares now on the market, but they
don't follow all the major sectors yet. When they
do, we will change over to include those.
Notice that we tell you what the underlying ETF is
in the first column. In the second column we give
you the recommended trading vehicles to use
depending on market direction. In the next column we
give you the current signal direction. (This will be
marked "NEW" when you have a pending buy for the
next morning). Next we have Which double proxy to
buy, followed by the trade date, Buy Price and
Current Index price. Note that all these prices are
for the UNDERLYING index. Then we have the number of
days in the trade followed by the Previous Trade
Profit. The last two columns are the point gain and
Percentage Gain/Loss for the current trade. AGAIN,
these gains represent the underlying index. If you
traded the Double Proxies you would be approaching 2
TIMES THOSE GAINS.
|Unmentioned in all of
this is options and we have a whole section devoted
to how to trade options on these double index shares
to really leverage these gains.
How long do these trades run? Typically they average
about 12 days, but in a volatile market you could be
out the next day, or in a trending market you might
be in for 20 or 30 days. I will have full historical
trades going back 2 years on the underlying indices
above and as an "out of sample" exercise will have
20 years of data for you to peruse on the SP500.
Another section in the manual will detail hedging
strategies using these proxies, which I find most
exciting. You can use them like covered call
insurance, but for much lower costs and you only
need to implement them in times of uncertainty. How
will you know? We show you how and will tell you.
DO I HAVE TO BUY THE MANUAL TO TRADE THE SYSTEM?
We have tried to make this system as intuitive as
possible, with simple signals to follow to lead you
all the way. Some will choose to do it themselves
and we have never discouraged that, even though we
would love to have you as lifetime customers.
Others just have an understandable aversion to
blindly using "Black Box" signals and want to know
what's under the hood before they put their money
down. The manual satisfies both requirements, but
there are other compelling reasons to get the
BEST OF BREED TRADING
One of the things we have been advocating over the
last 10 years is 'Best of Breed" investing when it
comes to trading. I show you the ins and outs of the
technique and make it so simple my dog-walker can do
it. It will soon become second nature to you and
offers even more alternatives for the investor who
really wants to sink his teeth into the subject.