Weekly Market Commentary

publication date: Aug 24, 2019

NOTE;  All posts are opinions only.  No investment advice is given.  Consult with a financial adviser and do your own due diligence before trading.
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Market Summary for Week Ending July 5, 2020

 

I'm keeping this weekly update short and sweet.

Chart signals are continuing to way outperform the traditional "buy and hold" approach.  Assuming one had traded 1x leveraged $SPY shares at each of my entry/exit points, these would be the compounded year-to-date results:

 

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January 1, 2020 - July 2, 2020*

Proprietary Trading System ("Shadow Index"):  +53.93%
Standard Buy & Hold S&P 500 Strategy:             -  3.12%

* Prices assume that you traded an equal % of your portfolio in $SPY shares (with no options leverage) at each of my entry/exit points.  Past performance doesn't guarantee future success.

 

Trading 3x ETFs could have tripled this performance, and proper selection of strike prices and expiration dates could have made options trading results even more lucrative.  Source:  https://www.tradingideas.info/articles/portfolio

 

So, how do the longer-term charts look now?  Honestly, I have concerns. The daily $QQQ chart has a Sell Signal on it:

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And the longer weekly and monthly $SPY charts also have tentative Sell Signals developing.  More concerning is the fact that stocks recently printed a Lower Low after a Higher High, which is often an indication of an overall trend change.

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Keep in mind that longer-term signals can take weeks to play out, so they are not very useful with short-term trading (let alone day trading), but it's important to keep in mind potential larger trends.