Friday - July 20th 2018
Profit UP on the First Signal Day.
This new Chart named UP, keeps a leger on the performance of our algorithms on the day they give a signal to Buy.
As you can see, the 5 groups are listed, and they are made up from all the different ETFs or stocks that we have used just since March 5, 2018.
(blog continues below charts)
A total of 443 Buy signals have been given since then and 247 of those signals made a profit on the first day that they were bought. This represents 56% and is the reason that we urge followers to accept signals on the first day that they are issued.
We do not wait to establish trends before giving signals as the algorithms are geared to look at tomorrow and what will happen then. I sometimes wish that there were no weekends or closed Markets with news that can interfere with the outcome.
Tomorrow the algorithms re-calculate and take another look at the next day. The same statistics then apply, and they will again make a profit 56% of the time.
I suppose it is like betting red or black in a casino. If we continue to win an average of 56% of the time and buy back the position with the money from the previous sale, we have a winning streak going. In the casino, we call this money management.
That really explains what we are doing. By putting the odds in our favor and selecting assets generally picked by the experts, we are fishing where the fish are.
Equally, by inverse Pairs trading, we have a willingness to invest in either direction.Thursday - July 19th 2018
Today’s Top 5 Results.
We have all kinds of statistics about our algorithms and their performance and perhaps you should see which ETFs or stocks lead today. See Chart TOP5.
This selection contains 4 Nasdaq stocks and 1 ETF and together they have produced 85% profit since March 5, which equates to 228% annual profit.
I am encouraged that our previous July Prime 5 selection as described on Chart 1X, has the same results with 85% current and 228% annual profits even though the selection is different. Continuity of statistics is important.
I am mathematically driven and so are my algorithms. I have been crunching numbers all my life and enjoy doing it. This is a condition or a disease.
We are constantly aware of numbers and the shapes that they produce. We can always learn something from a lot of data and it educates us about the present moment but can also educate our future.
For example, I have concerns that the Nasdaq high flyers are doing way better than the leveraged inversely traded Pairs. Logically, it is saying we are speculating with those future tax benefits and I look at this un-paid-for huge tax cut and reason that is where those profits will come from for a year or two.
We hear that investors always talk of bullish markets climbing a wall of fear and that is certainly present on the 6:00 o’clock news. We also hear them say - take what the market gives you.
I think that is what we are doing now. We should be well positioned with those inverse Pairs trades, if or when these markets turn down. I always find it difficult to be constantly expecting profits because the fear seems to shout louder.
I have often referred to the reasons why I like to base my stock picking on those professional Investment Managers. They have bigger and better computers than me and they can study minutia that I cannot.Wednesday - July 18th 2018
Corrected Graph Percentages.
I regret some recent errors on the graphs, but they are now corrected. When we started these graphs and began publishing charts on March 5, 2018, we calculated profit as a percent of invested cash. We did this due to each group using cash differently.
For example, the Inv. Manager group began with our standard $2,000 for each ETF for a total of $20,000 maximum.
Due to the different start dates and signals from the various algorithms plus the profits as we progress, this group still has not invested the maximum.
On the other hand, the Pairs group has 20 ETFs, but we usually are only in one side of each pair. So, we still used the standard $2,000 for 10 expected positions, even though we are switching sides from bullish to bearish with each algorithm signal. In this case also we have not quite reached our maximum investment.
The Nasdaq group changed from the previous 10 stocks to 20 stocks in July. At $2,000 each with the new maximum investment of $40,000 for the group, we still have not reached that maximum either.
The same situation exists with the Premier group and with 10 ETFs, they have not reached the maximum of $20,000 today.
The group reaching the maximum is the Prime 5, which at $2,000 for each of 5 stocks or ETFs, reached the maximum of $10,000 quite quickly.
When the Markets turn or stay positive for a week or two, we expect to be at or close to the maximum original investments for each group. When this occurs, comparisons between groups will be even more interesting as we will keep everything going with the same original capital.Tuesday - July 17th 2018
Nasdaq Group Continue Up.
Even though we are operating without FMI in the group due to the takeover bid, our Nasdaq group is holding on to second place on Chart 1X.
As this group includes stocks that are growing fast, it tells the story of hope for the future and the confidence of investors to invest there.
I like to read the future in these terms even though I invest strictly based on the algorithms but maybe they represent that same future if I look at my recent comments.
The Investment Manager group gives the story of where the smart money in large portfolios is going and I have commented recently with the PAIRS chart showing the opposite directions for stocks and bonds.
The Pairs group recently had fewer positions, but they were all on the bullish side. Fewer positions tells us that more positions are on the cusp and are struggling to decide which direction they prefer.
The Nasdaq group is the only group we have of individual stocks even though they are all high growth and their risk level is higher than the previous examples.
The Premier group has high individual risk as they are just the bullish side of our Pairs group and they are all leveraged ETFs. Some of that risk is negated by the bond and gold pairs and to a small degree, the oil services but that assumes they are included in a portfolio selection of pairs.
The Prime 5 group is strictly a measure of where we recently made high profits and is in the expectation of that trend continuing.
We are working on ideas to offer the performance and leverage along with the wisdom of the professional portfolio managers to further round out our selections.Monday - July 16th 2018
Better to Watch the Graph Slopes.
Once again, a look at the Pairs group at the close today. If you watch the Markets, you must also watch the News.
At these times, my first look is at the graphs for each of the groups on their various Booster pages and they continue to show predominant upward slopes.
It always helps to look first at the professional Investment Manager group where you would see a reflection of their efforts. Bumpy as it is, they are the basis of our stock and ETF picking but more than any group, they must look around the world for information.
I added the Pairs chart to show that all the Pairs bears were up once again except for the Financials this time which were bullish. We continue our algorithms without modification where Followers have seen performance in both Market directions over the past three-year period.
Our selections cover US Treasury Bonds all the way to Emerging Markets and many investment opportunities in between.
We are seeing an increase in daily trades from our back-testing of the fixed income ETFs, TMF and TMV. This compares with all other ETFs that we follow and can be interpreted as greater activity towards or away from safety. Increasing interest rates lean towards the former.
However, all graphs continue their upward general trend. We did remove FMI from the Prime 5 group due to the takeover price jump. This action reduced us to Prime 4 for the balance of this month. It also stands to reason that the Nasdaq group might well be a prime indicator of a future change in direction.
Another supporting result over the weekend was although the total number of Pairs showing a buy signal was down to 5, they were all on the bullish side.Friday - July 13th 2018
Our Algorithms are 70% Winners!
This WIN chart shows you our batting average since we started giving you daily predictions the day before we made each trade since March 5, 2018.
It currently represents over 400 trades in more than 50 different assets and has produced an average profit of 42%, which equals an annual profit of 117%.
These numbers are taken from all the daily signals that we send out each evening and can be viewed on our History Data page through July 1, last.
If you like them, please read on.
Our profit is also detailed on chart 1x which is usually published every evening along with the Blog.
I have sometimes referred to our algorithms being 60% to 65% accurate in their decision making and I am pleased to have enough solid pre-published evidence to back up my statements.
I do want to explain some facts. The Prime 5 group has the highest performance but also has the least trades. Obviously, these are selected each month and it is not surprising because they are generally expected to be going in the right direction.
On the other hand, the Investment Manager group has the lowest WIN percentage but represents a rounded portfolio selection of conservative investments.
My advice is to seek your own preferred investment style and find that match within the 70% average at the bottom of this WIN chart as some of these assets are included in more than a single group. All groups have exceptional short-term as well as long-term profits.
Each one of these trades started with an available investment of $2,000 on March 5 and has produced a total profit of over $41,000 since then. Our brokerage fees at $3.49 per trade amount to less than $1,500.
By March 5 of 2019, we expect to have $216,000 from our gradually invested $100,000 and the reason I say excess, is that these results have been obtained while the S&P 500 Index has gone up just 4.5%.
I always enjoy questions from our - Contact Us – webpage. We are excited now at this 7-year project with 3 years of publication behind us and we offer 47 years of previously proven Customer Service and reliability.Thursday - July 12th 2018
What to do with 2 BUYS.
So, the question arises: if you are looking at any Pair of ETFs, and you already own one of the pair due to a previous buy signal, what do you do if you get another buy signal for the second ETF.
If you have sufficient cash available or you have a margin account, you buy the second ETF, because the cost of ownership for a few days is insignificant.
The main reason to buy is that both algorithms are close to a decision point and the odds favor the side that is making the most profit for you.
In the long run, this will be the best strategy and the calculations that you could do are not worth worrying about.
The most likely concern is if you do not have sufficient cash available in your account and you do not have a margin account, such as an IRA or other pension account, you may run into the T+2 Banking Rule.
You could decide that it is better to sell the side that you already own. This action will use up one of the two days of the Banking rule to increase your settled cash one day sooner.
This really gets into the calculation weeds beyond this point, but I have had these warnings in my own IRA account and sometimes the algorithm signals come fast enough to be almost unfathomable.
The rule is you can buy a stock with the proceeds from a sale, but you cannot sell that new stock until the original funds that you used to buy it, have settled into cash in your account.
This drives me crazy. The Broker software could easily warn us ahead of time, but their software only helps them to give you the message after it is too late. Why not go the extra mile to help us avoid the warning? Some Brokers may do this.
That is most likely the price we pay for taking advantage of low Brokerage fees.Wednesday - July 11th 2018
A Demonstration of Pairs.
At about 11:30 this morning I was checking the Markets and saw a great demonstration of why I like Pairs Trading as a system for all seasons.
Look at the attached screenshot of our 10 pairs at that time. The Markets were down about 0.05% and just look at the 10 bullish ETFs and the 10 bears.
I just want to show how you will make money when the Markets decide to go in a sustained opposite direction.
We will have just as many bears when that happens as we have bulls today.
Alternatively, you can sell short-stock or perhaps trade the mis-alignment of correlated stocks. You could also sell covered calls against your stock and minimize your losses, or you could throw the Hail Mary and buy some puts.
Notice that the Bond TMF was going in the opposite direction at 11:30 this morning, so you could also sell all the stocks and move into bonds hoping for a substantial change in direction.
Of course, you need to know the direction of the Markets for these to work well for you and we all know that is not an easy decision.
That is why professional Investment Managers try to have a piece of every pie and make a moderate return on a more sustained basis for their clients.
This is also the reason why we keep an eye on what the professionals own for our Investment Manager Group which is aimed at conservative followers.
But take another look at the screenshot. If you have a method (an algorithm) for generally getting the correct short-term direction, it makes a lot of sense to trade inversely correlated ETFs.
The more inverse the better, assuming you can overcome the management costs of creating these 100% inverse and leveraged ETFs.Tuesday - July 10th 2018
Eliminating a Nasdaq Stock - FMI.
A proposed buy-out of FMI has caused the stock to trade around the offer price and any future gains are questionable. We will eliminate it from our Nasdaq list today by putting a SELL on the stock and will replace it next month.
We are approaching the point at which our – Profit since March 5 – chart 1TPC may have to be changed to a more recent date.
This is one of those decisions that has no perfect answer and we continually check the statistics to find the best date to use for best performance. We used the date of March 5, 2018 because that was the first date in the past 3 years that we offered these group selections.
From Chart 1X, our average profit from March 5, on all 50 positions is 43% giving us an annual profit from all 50 of 123% and a best annual profit of 257% from the Prime 5 group. All our trade positions were published to followers on the day before the trade was made.
My preferred group is the ETF Pairs group at 118% annual return, simply because of the minimized risk factor. I think this is a perfect selection for IRA and longer-term accounts.
I always use the – Rule of 72s – which tells you if you divide 72 by your annual interest rate, it gives you a projection of how many years it will take to double in value. This method tells you that 72 divided by 118% would double in value every 7 to 8 months. A worthwhile goal for everyone including me!Hello UK – Hello Hong Kong.
I was born in Coventry, England and my wife in Hong Kong but that has nothing to do with how pleased we are to have many followers in both countries.
Our website lights up every day from both places.
Knowing that UK residents have 0.5% tax to pay on trades, I am not sure if overseas trading can eliminate that. Fortunately, we have interested followers around the world and I am very pleased to see them.
I think it is more to do with internet reach and the ability to trade from wherever we happen to live.
I am also a Mexican Immigrant as I first migrated to Mexico City from England in 1963 for Bristol Aeroplane Company, after applying for Citizenship, and eventually migrated a second time to the USA after another job offer.
Changing the subject again, one of our Company accounts is with Interactive Brokers and they are well represented in many countries. They also have very low brokerage fees here in the US, but I believe they are higher in other countries.
I recently tested RobinHood.com, who advertises free trading, but I found that they did not trade American Depository Receipts and decided not to proceed with them. However, anything FREE is good.
Monday - July 9th 2018
PUMP UP your PROFITS - FOLLOW ME.
We have demonstrated two important facts and if you have followed us, you know how this has performed in the past.
The first is that our Algorithms provide easy signals to follow.
The second is signals perform well in the short-term, mid-term and long-term.
So, pumping up profits is demonstrated with our Prime 5 Group of 5 top performing ETFs. Now, we will show you how we do it with Pairs Trading.
First, look at our Rank Chart above and then decide how much of your money you want to apply to this method.
To keep this simple, I am going to assume for now that we will use $10,000 and all 10 of our pairs in this example. We will show some further examples later.
Make a 7-column chart and enter the 20 Pairs symbols and current prices in the first 2 columns.
From my Rank Chart, enter the Recent Daily Profit which is currently calculated for approximately 90 days, next to each ETF or add current values from the last column of the daily SUB Chart if you are a Customer.
Add Pairs together to give combined Profit and add to Combo Profit.
In the 5th column, calculate the Account Percent by dividing each Combo Profit by the total profit at the bottom of column 3. This tells you what percentage of the $10,000 you should assign to each Pair.
In the 6th column, rank the highest results of column 5 from 1 to 10.
In the Account Value column, multiply your Account Value (say $10,000) by the Account Percent value.
You now have your total investment value for each Pair based on recent profits. Divide this amount by the Price per Share to give a BUY quantity.
When you eventually SELL these shares, put that amount into the Value column and use that same amount to make a BUY when the next signal comes.
If you really want to PUMP UP your account, you could limit your Account Value to just the top 5 RANKED ETFs. This Chart can easily be set up on an Excel spread sheet and updated automatically.
Another tip is to make your account into a Margin Account which eliminates the T+2 Banking Rule when buys and sells come in rapid succession.
Note that occasionally we get a situation where both ETFs of a Pair have the same signal to buy or sell. This happens because the algorithms operate individually, and the signals are trying to make the right decision. When that happens, and you get the second buy signal, you could decide to stay out of both sides until only one of them has a buy signal. There is little to be gained either way, but we wanted to explain it.Friday - July 6th 2018
Our Look at Professional Investment Manager Portfolios.
(Note - Nasdaq chart is corrected to include 20 stocks instead of 10 at $2,000 each.)
It may be helpful to see the results of our research during June. The following chart gives you numerical results, but we also got some comments that we would like to pass along.
The tax cut is seen as a reason for earnings growth to continue through 2020 and mid-sized companies seem to get most of those votes.
Large companies are using the opportunity to buy back their shares and individuals in the general population are not seeing their expected wage growth.
We have reflected our findings into our Inv. Manager Group by using the ETFs that they own. We have also followed through with similar offerings in our Pairs Group. It should be noted that there is little change since the previous results in May.
Pairs are not as critical to world popularity due to our method of trading them. We also try to include strong movers where available. Some are closely correlated but this is mainly due to accounts of investment managers having 65% invested in Total US Stocks from Small Cap to Large Cap.
The Nasdaq stands alone as a collection of current top performers but obviously, due to their growth prospects, they do fit into currently popular trends.
I am also very conscious of the needs of conservative investors who prefer to follow a solid investment theory that matches our Inv. Manager Group. With that in mind, we are looking at a future change that will move the Nasdaq Group back to their top 10 rather than the current 20.
We would then offer a more conservative Pairs Group that takes advantage of the Inv. Manager Group, but also offers equal and opposite ETFs that could return an annual yield in the 40% to 60% range.Thursday - July 5th 2018
Pairs Trading the Roebuck Systems Way.
The old way of Pairs Trading used to involve 2 stocks that generally traded in a similar well correlated way except that the distance between them would expand and contract over time.
The trick was to trade that difference by buying one and short-selling the other when the distance between them expanded. The position could then be closed when the 2 assets traded back together again.
It is like watching paint dry but can be low risk and profitable. However, we have a much better way with ETFs.
Our algorithms trade equally well in both directions and with all the new and leveraged ETFs available, we can choose a Pair that are correlated to move in the exact opposite direction.
By using our algorithms, we don’t need to wait for them to trade apart or trade back together again. We simply trade them almost 100% of the time in either direction according to the algorithms and short-selling is not required.
We also select Pairs that are triple-leveraged to gain the maximum movement and profit from each trade.
Our algorithms are perfectly tuned to work with ETFs that move 100% in opposite directions because they specifically work to detect a change in direction for tomorrow.
You will find a complete selection of high volume ETFs on our website and the signals when to buy and sell either side of the pair is sent to you each evening.
Try it, you will like it. . . !Tuesday - July 3rd 2018
How to Make YOUR Decision.
What type of investor are you? Here I try to give you guidance on making your decision based on the information and signals that we send to you each day.
Rule 1 for BEST results. BUY or SELL at the next Market Open after we send a signal change.
Rule 2 for SAFE results. BUY or SELL on any other day that you see a signal.
Rule 3 for GOOD PRACTICE results. BUY at least 3 to 5 positions and limit yourself to 11 positions, unless you want or need extreme diversification.
Before going to rule 4, I need to point out that all the following back-tested numbers are for 1 year and the current actual results are since March 5, 2018 when the S&P 500 Index has produced a return of 1.2%.
I will add that I have been publishing these algorithms for more than 3 years and the only thing that beat them was Credit Suisse removing their ETF Volatility symbol XIV from the marketplace overnight.
Rule 4 requires YOUR JUDGEMENT. Some of us can make aggressive risks and others do not choose to take those risks. We offer different levels to suit everyone.
The least risk is the method we use to make our initial selections. Each month, we research what professional investment managers are currently owning and try to match our Investment Manager Group to their portfolios.
We select unleveraged ETFs that best correlate to their professional choices and produce our portfolio of 10 Investment Manager selections. Our current back-tested algorithms improve our Investment Manager group by about 358% to produce a relatively safe annual return of 19%.
The highest risk is probably the method we use to select our Prime 5 Group. From all the algorithms that we run and publish every day, we currently take the profits of the 5 best performers since March 5, 2018 up until the end of the previous month and put them in the Prime 5 Group each month. Our current back-tested algorithms improve this Prime 5 group by about 157% to produce an annual return of 244% assuming similar Market conditions.
We have 3 other groups that may fit your needs better than those described above.
One of these is our Nasdaq Group of 20 top performing Stocks. Minor changes to this group occur each month. Our current back-tested algorithms improve this Nasdaq group by about 143% to produce an annual return of 122%.
Here, you should look at all the back-test charts on our website for all selections and notice how well we manage to stay with the uptrends and get out of the downtrends.
The second of these groups is our newer ETF Pairs Group of 20 leveraged ETFs. This group consists of 10 pairs of ETFs that broadly correlate to the Investment Manager sectors. Each pair trades inversely to its partner and operates uniquely. Consequently, they are jointly in the market about 100% of the time but move in opposite directions. Occasionally they are both in or out of the Market, creating an approximately neutral position. Our current back-tested algorithms improve this ETF Pairs Group substantially to produce an annual return of 109%.
It is worth mentioning here, that our algorithms work equally well in both directions with ETFs and stocks and this type of pairs trading with 3x leveraged ETFs removes downside risk substantially. It also overcomes the large daily management costs associated with providing the leverage.
Our final Premier Group consists of the 10 bullish ETFs from the above Pairs Group and therefore does not trade the Market reversals. Our current back-tested algorithms improve this Premier Group by about 413% to produce an annual return of 89%.
Personally, when I was younger, I would have chosen the Prime 5 Group, with the hope of large profits and great results. Today, I choose the ETF Pairs Group, knowing that it is relatively safe and low risk. One thing that will hurt me is flat motionless Markets and I am not planning on that today. This paragraph is my opinion and not my advice.Monday - July 2nd 2018
We Hope July Changes Went Smoothly.
This was a larger change than we like to do at month-end, but the potential profits will be higher with the changes.
The S&P 500 includes all the Dow 30 stocks and the Nasdaq includes about 90 of the S&P 500 stocks.
Our Algorithms work equally well on all stocks and ETFs, so it makes sense to go with the maximum profit potential and expand the Nasdaq list to cover a wider range for interested Followers.
You can choose your own selections or potentially use the SUB chart to help.
Subscribers can see the SUB chart each evening where the last column gives historical - Daily % Gains - from the Algorithms and could be used to help make your selections.
Concentrating on top performing Nasdaq stocks, gave us the space to expand the Pairs Trading selections. Trading in both directions with maximum leverage gives you maximum potential with the least risk and fulfills the interest of many current investors.
Conservative investors will still like our Professional Investment Manager group which remains a correlated group of ETFs matching professional selections and we have included all aspects of their portfolios in our selections of Pairs.
This includes fixed income as well as ETFs that represent different world Markets and sectors.
Only ETFs give us easy access to trade in both directions.
However, the individual performance charts on the website are worth reviewing to see how well our Algorithms stay with a profitable trend and get out when circumstances indicate a reversal.
This works well for Nasdaq stocks. However, it gives us the ability to profit by trading the reverse direction as well by using inverse ETFs.Friday - June 29th 2018
Improved July Changes.
We find no changes in our underlying Professional Manager Portfolio of 10 ETFs and it remains the same for July.
As you may recall, the S&P 500 Group swallowed up our initial Dow Selection. The same has now occurred to our S&P 500 Group just like the Dow Group and there will now only be one expanded and combined Nasdaq Stock Group of 20 top performing stocks.
Our other popular Pairs Trading Group is also being expanded to include 20 ETFs or 10 Pairs that reflect different sectors of the Professional Manager Portfolio.
In theory, by following and correlating with Professional Manager Portfolios, the least long-term risk would be with these unleveraged ETFs. Long-term results from these tend to be in the 9% to 13% annual return. However, we expect our algorithms to provide approximately a 250% to 300% gain on those professional portfolios, based on over 3 years of results and more years of back-tests.
The best performers are generally the Nasdaq and Pairs Groups and that is why we have expanded them. The Nasdaq selections can have some spectacular results especially with the gains that our algorithms add to their normal Market performance.
For those investors that follow Pairs Trading, this can be the most rewarding because our algorithms perform with 3x leveraged ETFs in both directions. Using ETFs that are uniquely designed to operate in exactly opposite directions, they quickly recognize the best direction to follow.
Normal maintenance costs for the 3x leveraged ETFs can be considerable but these are easily overcome by the gains from our algorithms.
The Bullish side of our Pairs Trading selections now becomes our Premier Group of 10 ETFs.
Finally, our Prime 5 Group consists of the best 5 previous month-end performers.Thursday - June 28th 2018
Nasdaq Gives Way to Pairs.
We have seen a dramatic change in recent days between the Nasdaq group and the Pairs group.
Exactly as expected, the Pairs group has taken advantage of the opportunity to trade in the opposite direction and seems like it just kept going.
On the other hand, the Nasdaq has been taking a break along with the other single direction groups.
This is where you can see the danger of trading 3x leveraged ETFs with the wide swings they can make in a few days.
The safety position in single direction groups is first of all related to the professional portfolios that we research and follow.
This is amplified by our Algorithms that are just as capable on the downside as they are on the upside and will tend to get out of positions quickly.
Finally, it is good to look at the S&P Index compared to our average results and we remain up about 20% while the Index struggles at 1.3%.Wednesday - June 27th 2018
How Far Does an ETF Move?
Some interesting comparisons can be seen if you add the day-to-day price changes for each asset for one full year and then divide the accumulated change by the average price.
For example, our Investment Manager selections move about 160% of their average price. They are conservative high-volume assets with less risk.
Next are our S&P stocks at 417% and then our Premier ETFs at 435%.
The Nasdaq selection is at 705% but the winners are the Pairs Trading at 800%.
Why do we care about these numbers? Because our Algorithms are based on Mathematics and numbers always seem to reach expected results.
The first result you may notice is that the two selections that tend to rank the highest are the Nasdaq and Pairs Trading groups. Not surprising, since they move the most and the opportunity to clip profits from those moves is higher.
Alternatively, the lowest movers are the Investment Manager selections which correlate to huge portfolios of professionally managed wealth around the world. So much wealth that it moves more slowly but also has less risk.
Then comes the Nasdaq with all the up-coming businesses and ideas that investors pay higher prices for, with the expectations of making that fast dollar.
Finally, we get to the winners with so much movement to clip those profits.
If we could make these into a conservative investment, could we have the best of both worlds? The answer is YES.
We do it by alternatively investing in both directions in ETFs, that by themselves are very risky assets, but we change horses when we see a change in direction.
Obviously, the 3x leveraged ETFs are the risky end of the spectrum, but by changing direction reasonably well, using our Algorithms, we get to ride the faster horses much longer.Tuesday - June 26th 2018
Pairs Trading Becomes the Advantage.
Further to our Blog yesterday, the 100-year long-term Markets are going up and we addressed this situation by using professional Investment Managers.
We have often remarked that our Algorithms are solely geared to tell us what the stock or ETF is going to do tomorrow only. Not the day after that. Their daily prediction is correct over 55% of the time.
Pairs Trading then takes care of in-between trend changes and you will like our July selections and here is why.
If the Markets begin a short-term trend of more than one day in the opposite direction, they will soon change their signals to the opposite direction. This can be from a Buy to a Sell or a Sell to a Buy.
In the old days and I mean more than 5 or 10 years ago, when the Markets turned down, you would have to sell borrowed stock in a short-sale, or perhaps get involved with the Options Markets. Not anymore.
ETFs have solved this problem by producing INVERSE assets that immediately go in the opposite direction, so when our Algorithms begin signaling a Sell, we can simply sell our existing position and buy these Inverse products. No more short-sales.
Now there are some limitations that we need to consider.
Leveraged ETFs lose value daily due to the daily maintenance and management of retaining the leverage. They use options to create the leverage which lose time value as they approach their expiration date and strike price.
The other result of having this leverage is the speed at which they can change value and hence, have added risk.Monday - June 25th 2018
The 200-Day Moving Average.
Once again, we went down through the 200-day moving average and are close to the 50-week moving average.
I mention this because I used to watch all this technical stuff all the time and it became the reason why I developed Algorithms nearly 8 years ago. Will we bounce off it and go back up or will we go through it and look for whatever comes next?
The advantage of algorithmic trading is when you know it works, you follow the signals when issued and go back to whatever you like to do for fun.
We are well over 3 years of publishing signals every evening and have no reason to go back to Technical Analysis again.
Our July versions are almost complete, and we are continuing the concept of letting the professional Investment Managers of worldwide portfolios do the selection for us.
In July we will continue to include our correlated ETF version of these professional portfolios.
We also will include an expanded 10-ETF selection of our 3x leveraged portfolio and have added the 10 most INVERSELY correlated ETFs to create a Pairs Trading selection of 10 Pairs that reflect the professional portfolio.
Plainly speaking, we will have 3 sets of Exchange Traded Funds.
1. A none-leveraged, correlated and balanced set of 10 ETFs matching professional portfolios.
2. A 3x leveraged, correlated and balanced set of 10 bullish ETFs also matching professional portfolios.
3. A 3x leveraged, correlated and balanced set of 10 ETFs that INVERSELY match the professional portfolios. (This creates 10 natural sets of leveraged ETFs for Pairs Trading).
Adding to the above, there will be an expanded selection of 20 Nasdaq stocks which are proving to be the most popular and successful group. The stocks that are also in the S&P lists may appear as a part of the Nasdaq selection.
Finally, we will continue with our Prime 5 selections of ETFs from the entire list.Friday - June 22nd 2018
Where Are the Best Stock Picks?
The answer is in the portfolios of large Professional Investment Managers or on Roebuck Systems website. We research them continuously and choose our selections to correlate with them.
We do it because our Algorithms work on good investments just as well as they work on bad investments.
Conservative Investors can follow our – Investment Manager Boosters - and know they are investing with these professionals in mind rather than some lesser known source. Most of our selections reflect their portfolios.
As a starting point, they may have 70% in stocks or funds and 30% in income producing bonds and they adjust those percentages up or down according to their future expectations.
Their stock portfolio is further adjusted with mixtures of North American, European, Asian and Far Eastern stocks or Emerging Markets. Finer adjustments can be made with specific countries.
Major Industrial Sectors are another way of tuning these portfolios by being specific on Technology, Healthcare, Finance or other major categories.
Bonds and interest rate portfolios are also adjusted to include mixtures of Federal, State, Municipal and Corporate sources as well as short or long-term maturities.
Mutual Funds also allow some fine tuning but ETFs and ETNs, (Exchange Traded Funds or Notes), are relatively new and cheaper ways to create baskets of assets. The huge growth of ETF/ETNs can produce savings from 0.5% to 1.5% or more, depending on the added loads and fees that can be associated with Mutual Funds. This difference produces critical savings to major investors and/or critical income to major producers.
Beyond these critical decisions, there could be smaller specialty investments in precious metals or volatility. There is competition to deal with and every Manager is looking for that extra percentage point over their competition.
So, we research these portfolios and try to accurately correlate our selections of Exchange Traded Products and stocks so that our Followers will be where the smart money is being invested.
We try to follow this concept through all our selections and always look at volume as an important factor.Thursday - June 21st 2018
This Drives Me Crazy.
I had a quick look this morning and since March 5, 2018 the S&P 500 was down over -0.5%.
Our average since March 5, 2018 is up 19%. Again, our AVERAGE is up 19%.
I often wish that I had chosen a different start date for all comparison charts, but it is way too late to change my mind. I wanted to be able to compare everything going forward and this is where we are.
Professional Investment Manager Portfolios are another key factor and are very important to us.
As you recall, we started with our DOW group, S&P 500 group and Nasdaq group along with various ETF selections.
There is no doubt that the Nasdaq selection is earning a permanent place with well over 100% annual returns even in these flat markets and we do not have any plans to eliminate that group.
By checking the various individual asset charts and back-test charts, you can also see that we do a very good job of staying out of down Markets. There are a few that occasionally synchronize with our Algorithms and take a while to detach themselves but overall, the record is good. UGAZ and DGAZ are good examples of this. That is one of the reasons why we suggest following a minimum of 3 assets and a maximum of 11.
ETFs however, offer remarkable results and keying them to professionally selected assets as we do will always be key to our selections.
We research PROFESSIONAL portfolios and CORRELATE with them.
We LEVERAGE and stay with the UP markets and get out of the DOWN Markets quickly.
With ETF Pairs Trading, we also INVEST in the DOWN markets as well as the UP markets.Wednesday - June 20th 2018
UGAZ and DGAZ not Performing.
We mentioned the Pairs as being a preferred group in terms of performance, but gas is hurting our results this month and will be removed and replaced in July.
Too many trades lately causing us insufficient time to get into a trend.
Between the two of them there are about 220 trades per year which is way too much switching direction.
My advice would be to stay away from gas until it comes into favor again.
We will have some great Pairs replacements for July and more positive changes.Tuesday - June 19th 2018
We Begin Looking for July Additions.
Before looking forward to July additions, we should take a look back at which results have been good for us.
Our average Group investment from chart 1Y has been $15,624 with a profit of $3,309 giving us a profit in 106 days of 23% or an annual profit of 77% so far.
All this while the S&P500 has made a 3% profit for an annual profit of 10% for the same 106 days.
We have Boosted the general market results nearly 8 times over this same period using 50 different assets.
I like those numbers very much but am always looking for a better way so that everyone who follows us will do better than the average of 77% annual return.
If you were following our lowest group, the same chart shows the professional Investment Manager portfolio would have returned 7% so far with an annual return of 23%. My comments from earlier days suggested that 14% average annual return over a long period for this group would be very good.
If you were following our highest group, ETF Pairs group has produced 38% so far with an annual return of 131%.
This gives you the hint that July may well see some new ideas in the Pairs arena.Monday - June 18th 2018
Nasdaq Group Remains Popular.
It stands to reason that the faster growth companies are in the Nasdaq range as many of them are newer and growing their operations.
We get to select from this group which also tends to have higher volatility and produces greater returns through our Algorithms.
They persistently stay at the top of our groups and compete well with the Pairs selections for the number one position in back tested returns. This brings to the forefront one of the features of the Algorithms and their annual results.
The net results obtained in our live accounts are a compilation of the underlying asset gains plus the arithmetic gain from the buy and sell trades specified by the algorithm.
If the underlying stock or ETF is doing well by itself, there is less meat on the bone for the algorithms. You can see this in the Chart 1x column under -BACKTEST Potential Gain. Nasdaq gains as a group, are in the range of 137%.
Comparisons with the Pairs group are not appropriately accurate because we switch sides in those trades and that complicates equal comparisons. That being so, we prefer not to attempt to put a value for the Pairs gain even though their performance is very high.Sunday - June 17th 2018
ETF Pairs Trading Decisions.
When we added the ETF Pairs Trading selections, a deciding factor at the time was to include both sides of the pair so that we could publish the entire story.
As we are mostly invested in only 5 ETFs because one of each pair is moving inversely to the other, it seems like a waste of opportunity.
However, we have seen on recent days that we are occasionally in both sides at the same time or alternatively, in neither side at the same time. Either way this puts us in a neutral position, assuming equal cash investments.
This tells you that the algorithm is thinking but not sure of the next move. Perhaps the best decision when you see the second side signaled as a buy is to sell your existing position and be neutral in cash.
If you buy the second position instead and then sell one of them later, you still pay 2 commissions either way, so you are probably better off being neutral in cash.
I would choose that in my IRA account because the T+2 Banking Rule can become a problem if I don’t have the required settled cash for a trade if the next buy will use the balance of my account value.
This is where margin accounts become useful because the cost of using borrowed money for one day is very small and your Broker avoids annoying you with one of those Good Faith Violations.
A margin account avoids all these Banking Rule problems as well as our own 98% rule.
When we are making a final buy to use up our last available capital, we always use 98% of the capital and leave 2% so that overnight price changes will not cause our Broker to cancel a trade at the next open. Paying interest for a day on a small amount is preferable to missing a buy and it avoids doing that 98% calculation.Thursday - June 14th 2018
Investment Managers Portfolios.
We continue to refine our derivative selections from professional Investment Managers because we want our Algorithms to have the best source material to work with.
Having confidence in the underlying funds and ETFs is important when moving from an unleveraged account to one that is highly leveraged like the 3x and Ultra ETF selections that we include.
However, it is also important to look at the back-tested charts for each group to see how we manage to stay away from down markets.
Looking back at these charts as well as following them into the future with us, shows that in most cases we quickly get out and stay out of steep declines.
This is all part of the Algorithm nature to add together most of the up-moves during the year and avoid hanging around during the down slides.
We are also aware of the daily volumes needed to keep the bid/ask spreads as close as we can. Our average trades are currently running at about 17 buys plus 17 sells per year per stock which is less than 3 per month.Wednesday - June 13th 2018
Trade on the First Day of a Signal.
Always trade on the following trading day after the first signal change occurs.
Our Algorithms are designed to Buy or Sell on that next Market Open and unless you have some unique knowledge of your own to override the signal, it is strongly recommended that you stay with the signal.
There are lots of flashes of brilliance for you to want to change your mind and some of them on some of the days will make you wish you had. There are always improvements to be had and we are looking for them every day.
As stated, we have been looking for a long time but remember the main advantage was the ability to carry on with a normal activity during the daytime and avoid watching the Markets all day long.
There certainly are other systems that can follow open trading and may signal the exact time for you to make your trade but ours is not designed to do it.
We prefer to look for what the Markets can offer us and then decide which are the best odds that we can find.
Stock prices tend to move around facts that are either positive or negative and are not randomly distributed. They tend to cluster around the same price when there is a lack of information to move them.
Adding or eliminating a stock or ETF from our main crop of 50 opportunities has become a month-long job for us. We take it as an opportunity to adjust the portfolio to the longer-term changes in the daily news cycle.Tuesday - June 12th 2018
Why Comparisons Begin March 5, 2018
Although we began working with these Algorithms in 2011, we previously published data for volatility for 3 years, through early 2018 and stopped doing that when Credit Suisse took their inverse ETF, XIV off the market.
We then continued with common stocks and ETFs early in 2018, and we publish results going back 12-months for those that we recommend.
You will find these 12-month charts on the pages of the various Booster groups, along with the current history of all trades beginning on March 5, 2018.
As all signals within the Booster groups did not occur on the same date, we wanted to provide live signals as they occur before the actual trade date. We wanted to start publishing these new signal recommendations to build at least a 12-month record for Subscribers to see them in action.
When we reach one full year, we will then decide how best to proceed.
It is worth repeating that back testing beyond 18 months is of little use to our results even though we have gone back as far as 1990 in some cases.
Live comparisons between the Booster groups are important for Followers and Subscribers to judge the best way to proceed for their own investment decisions.
Different styles and risk levels are available ranging from a conservative Investment Manager portfolio to a leveraged and fully correlated Premier version of the same portfolio.
We also offer Common Stock selections from S&P 500 and from Nasdaq as well as leveraged Pairs Trading recommendations.Monday - June 11th 2018
NASDAQ Stocks Remain First.
We continue to have great success with the Nasdaq Boosters which are up at 98% annual profit while the S&P 500 Index remains at just 14% annual return. That is a 700% gain on the Index.
You can see from the chart 1Y that the average gain ratio is 5.3 to 1 today or equivalent to 530% gain for all 6 groups of Boosters compared to the S&P Index.
Considering that 20 of these stocks are either from the Nasdaq or S&P 500 and have no leverage, we are getting much better than a 200% gain from our Algorithms even in poor Markets.
Although we are doing well with regular stocks, we will see a larger benefit from the leveraged ETFs when we get a positive direction for our Markets.Friday - June 8th 2018
Investment Manager Portfolios - Part 3.
2 days ago, we used the current Inv-Manager Boosters result of 14% annual return, which we then boosted to 31% annual return. Continuing with results as of yesterday, our Premier Boosters were at 41% annual return which we then boosted to 105% annual return. These numbers vary slightly each day.
Then we said – If your 70% in an ETF portfolio currently makes 14% annual profit and you take one fifth of it and run it through our Algorithms, your new annual profit jumps up to over 17%. That is (14+14+14+14+31)/5 = 17.4%.
Now, we can move up the leverage ratio ladder. We said that our initial selection comes from professional world-wide Investment Managers. Then, using correlation formulas to maintain better than 95% correlation, we found the 3x leveraged ETF products that best represent the exact same portfolio.
We now have our Premier Boosters which you can find on our website.
Next, we can repeat the calculation for the Premier Boosters. We will also use actual pre-published trades based on 7 years of research and published since March 5, 2018.
Please note that this period has not been good for the Markets and has produced an annual return for the S&P 500 Index of only 3.7%.
Our Premier Booster group has produced 39.3% annual return as seen in the Buy & Hold column whereas the base unit Inv Manager group has produced 13.7% annual return also from the Buy & Hold column. That is a 287% increase (39.3%/13.7% = 287%) and a correlation of almost 96%. (287%/300% = 96%).
Suppose your 70% of your portfolio in ETFs is currently making 39.3% annual profit as published in our Premier Booster Buy & Hold column. Now look at the actual potential annual Algorithm Gain at the bottom of the Premier Booster chart. This group has a gain of 265% and an annual profit of 104.3%.
Finally, look at these results. If you take one fifth of your portfolio and run it through our Premier Booster Algorithms, your new annual profit jumps up to more than 52%. That is (39.3+39.3+39.3+39.3+104.3)/5 = 52.3%.
Once again, suppose you increase the portion through our Algorithms to two fifths of your investment, your new annual return jumps to over 65%. That is (39.3+39.3+39.3+104.3+104.3)/5 = 65.3%.
As previously stated, for each one fifth (20%) of your portfolio you invest in Premier Boosters, your annual profit jumps by one fifth of the difference in the annual return rates; in this case 13%. That is (104.3% - 39.3%) = 65%/5 = 13%.
The point of these Part 1, 2 and 3 explanations are that you start with 14% annual return from the expert Investment Managers and jump to 31%.
Alternatively, in the leveraged and correlated portfolio, you start with 39% return and today you arrive at a potential 104% annual return. This is using expert managers all the way through: -
1- Professional Portfolio Creation
2- Correlation and Leverage and
3- Roebuck Systems Algorithms.
All the above data is taken from actual published results and may vary slightly every day, but it can be verified at any time from actual data. Future results will also vary daily but we will continue to publish our trades on the previous day to all subscribers.Thursday - June 7th 2018
Investment Manager Portfolios - Part 2.
If you read the Blog yesterday, you will better understand where we are going with these added comments today.
Correlation of stocks is a designation used by many investors to find assets that move in a similar pattern.
If you laid the chart of one asset on top of another and they perfectly match each other, you would say they have a 100% correlation.
Correlation used to be a difficult thing to find in stocks.
Perhaps the first attempt at trading opposite directions was switching from Long to Short. Insurance policies, which became known as Options, then gave you the choice of Calls or Puts.
Now we have ETFs with the leverage given to them on a daily re-calculated basis using Options. In theory, when the Markets first open in the morning, they have a leverage factor of 2x or 3x the movement of the base unit and are reshuffled every night after the Markets close, to return to this published leverage value.
So, here we have an ETF, leveraged to go at 3 times the speed and distance of the base unit and reshuffled every night so that it correlates 100% with that same base unit!
Have we arrived in Heaven, or am I missing something?
Here is what we do. We take the Investment Managers professional selections and then use the ETF Managers professional mathematics to find something that has 100% correlation to the base unit and then it triples the movement.
Not finished yet. Now we use Roebuck Systems Algorithms to tell you when to buy and sell the ETF to increase the profits by an average of about 225% for this particular group of assets. What could possibly go wrong?
Our Algorithms look at long-term and short-term factors individually for each different asset and group. They then work to keep you out of the market when it goes down but will keep you in the market when it goes up.
So, if the Investment Manager experts make 13% and the ETF experts multiply the 13% by 3 to make 39% and we then multiply the 39% by 225%, then YOU end up with 88%.
From all of our selections, this one has the least potential but also has the least risk.Wednesday - June 6th 2018
Investment Manager Portfolios - Part 1.
Large portfolio Investment Managers are the source that we study and use to provide our Inv Manager ETF selection and you will notice it has had a steady but upward movement.
This group probably has the least risk as they are none-leveraged ETFs, but they are not balanced to equal the percentage of ownership by these managers. Also, they represent only the ETF portion of their accounts.
Our Algorithms currently move them up an additional 17% from an average 14% up to 31% of annual profit.
The long-term inflation adjusted return from the stock markets is usually quoted at about 7% and before inflation that is about 10%. The above 14% gained by our selections from these major portfolio managers seems to fit the numbers when you consider that they also have a major portion in Bonds at lower rates.
So, in longer term theory, if you adjust your percentages year by year and put approximately 30% of your portfolio into Bonds and the balance in our Investment Manager ETFs, you are a long way to meeting normal and average Market returns.
These numbers vary slightly each day.
Now suppose your 70% in ETFs is currently making 14% annual profit from above and you take one fifth of it and run it through our Algorithms, your new annual profit jumps up to over 17%. That is (14+14+14+14+31)/5 = 17.4%.
Once again, suppose you increase the portion through our Algorithms to two fifths of your investment, your new annual return jumps to over 20%. That is (14+14+14+31+31)/5 = 20.8%.
As you can see, for each fifth (or each 20%), that you run through our Algorithms, you gain one fifth of the difference in the annual return rates; in this case 3.4% for each fifth. That is (17%/5).
Obviously, we are using the widest held none-leveraged portfolios from our research, to arrive at this 31% annual profit. This is the most risk-free selection that we offer and based on our published results, would produce an additional EXTRA income of $17,000 each year from every $100,000 that you invested.
All you must do now is watch our Algorithms until you convince yourself that they are real and how well they work.Tuesday - June 5th 2018
Available or Maximum $2,000 per Stock?
Complicated charts but we do have a reason for it. It became necessary when we began all investments on the same date, March 5, 2018, and then found it beneficial to list assets in alphabetical order.
The problem was everything was giving us a BUY signal on different dates and to top it off, the signals didn’t come in alphabetical order.
So, to show profits as a percentage of investments, we had to accumulate them until we reached our maximum of $2,000 per stock in each group.
So, why $2,000 per stock? No good reason other than it seemed like a good average number at the time. We knew we wanted to use a constant amount, the same constant start date and put everything in alphabetical order.
The problem now is we hesitate to change anything because the history and comparisons are easier to show and compare.
It probably makes little difference now as we almost have the maximum $20,000 in each group of 10 assets. It does make it easier to start new groups such as the ETF Prime 5 or the Pairs Trading because of these standards. We can replicate them all back to these standards, so I hope you can live with our methods.
Looking backwards, it probably would have been better to use $1,000 per stock but we already had to eliminate Amazon because the price is close to $1,700 per share.
We also often receive questions about the minimum investment necessary and we determined that $2,000 divided into 3 stocks would be ok, especially if the better performers are selected. Even with online commissions and subscription costs, this would make a workable minimum, but profits should be put back in and perhaps double that amount is a better number.Monday - June 4th 2018
How Many Stocks to Own? Suggest you read all of the comments for today.
If you want to go crazy, just google this question and everybody has their own best solution, but it can help to answer the question for your personal situation.
My opinion on this subject is colored by my history from an early age when I first borrowed money to put into the stock market until today and my reasons to develop our Algorithms.
That is why I look at risk now as an older investor and why my absolute minimum would be 3 positions. One of them could be a Pairs position as you might only be in one side of the Pair at a time.
I would move to 5 positions as soon as possible and that would nicely line up with our new ETF Prime 5 group or any other selection from the entire 50 selections that we cover with our Boosters.
Of course, you could find 2 or 4 other systems and just use 1 from us and that might satisfy these minimums, but from my old experience, do not borrow money and put it into wildcat oil wells in Australia. Did that and lost it all.
So, the risk factor is first on my list, but you can also have too many positions.
My personal limit is a maximum of 11 because you can begin to duplicate your sectors and especially when you have all these ETFs available, you are already covering multiple bases with them. The earliest example is SPY which represents all 500 of the S&P 500 stocks. That one is like watching paint dry, but you can now select almost anything in vertical channels and ideas.
I do want to emphasize that we attempt to give you a well rounded and thought out selection starting with current world-wide Investment Manager favorites. Your own personal preference can be affected by the percentage of your investment account that you apply to each position. I explained recently that currently many of these Investment Managers have approximately 25% of their accounts in Total US Market ETFs.
Another 20% to 30% of their accounts are in bonds of various types and they select where the best returns are found.
We have looked at these bond ETFs as well and not surprisingly, our Algorithms also work very well on those ETF offerings. You can expect something in that category in the future from Roebuck Systems, but you may be disappointed with the returns. After all, few people invest 100% into bonds but bonds with an algorithmic kicker are a lot more interesting.Friday - June 1st 2018
Some Useful Updates in June. Suggest you read all of the comments for today.
The 6 main groups of assets to choose from begin with the Investment Managers and Bankers Group which are updated to match large ETF portfolios held by Investment Managers. In the past year, they have produced 12% and our Algorithms have produced 30%, a gain of 248%. These are not leveraged ETFs but are widely held.
The second group are selected from the S&P 500 and have produced 77% in the past year alone and our Algorithms have produced 135%, a gain of 175%. These are all stocks.
The third group are 5 new ETF Pairs which together as a group, lost 8% but our Algorithms have produced 125% profit. Many investors like to trade long and short and here we take advantage of the leverage available in ETFs so that no short trading is required. Although they do not exactly switch positions on the same day, they sometimes remain in both positions effectively trading in a neutral position.
The fourth group are selected from Nasdaq and these are plain stocks. In the past year, they produced 242% with a buy and hold strategy and our Algorithms have produced 349%, a gain of 144%.
The fifth group are selected to represent Investment Managers and are leveraged ETFs that gained 33% on their own but our Algorithms have produced 97%, a gain of 290%.
The sixth and final Prime Group is a smaller selection of 5 from the above 50 that we publish every day. By themselves they produced 35% during the past year, but our Algorithms produced 89%, which is a gain of 257%.
The above percentages will change every day because our Algorithms are run every day after major US Markets close to provide the very latest information available. The daily Blog keeps you up to date on the exact results.
The two new groups named ETF Pairs and ETF Prime 5 are designed to offer smaller selections and more specific selections for Followers. These may be helpful for you to test our system of signals every evening. They provide powerful results that represent trading since March 5, 2018. We use this date as the initial publishing date for these specific Algorithms especially so that comparisons can easily be made.What to do with the New Month Groups.
The same rules always apply. If the stock or ETF is no longer on any of our lists, you sell it at the next market open and replace it with any stock or ETF that is on our lists with a greater potential annual return.
If you want to try Pairs Trading, you could decide to add one of the Pairs as replacements to the next 2 sales.
Alternatively, what I do is continuously change to a different asset or group when sales occur, whether it is the end of a month or not. I am constantly trying to improve my portfolio every day and like to be an active trader.
As far as how many to own, my preference is at least 3 assets in any account for safety and no more than 11 assets, depending on your personal situation, your preferences or your retirement plans.
Tax exempt accounts are always handy and preferred. If it is available to your type of account, I would modify or open it as a Margin account for 2 reasons.
First, there are occasional situations when our Algorithms buy and sell on alternate days and you could run up against the T+2 Banking Rule which prevents you from using cash that has not settled yet. The use of Margin or borrowed money for 24 or 48 hours prevents all these trading problems.
Second, I have found that the Margin Interest Rate at your Brokerage is usually lower than any other form of loan or credit card, so it is a good place to borrow money. Unfortunately, you are not allowed to do this with an IRA or tax advantaged account.
One final point. We use a standard of $2,000 initial investment and a start date of March 5, 2018 for all assets so that easy comparisons can always be made between groups and assets.
One point to remember is that with Pairs Trading, you can assume that you will only be in one side of the pair at a time, although some overlapping does occur.Thursday - May 31st 2018
Statistics Worth Looking At.
It is often difficult to see where we are going when the DOW goes down 250 points and the S&P goes down 19 points but there are numbers in our charts that you can look at for better information.
For example, at the top of each graph, you can see the current annual return of that group of stocks as well as the S&P 500 since March 5, 2018.
If you divide our return by the S&P you can easily see how much better, we are doing. You can also add all the groups together to see an average annual return and divide that by the S&P 500.
The answer today is 64% average annual return for all Algorithms and 3.8% for the S&P. This gives us a number (just for today) of 64 divided by 3.8 or about 16 times better than those 500 stocks.
This number is going to get better as time slips away and I need to explain that. If you look at the History Data page of the website and check the Maximum Investment number just above the trade log for each group, you will see that only 4 of them today have reached $20,000 maximum investment or $2,000 for each of the 10 stocks.
This means that we have not yet invested the maximum in some of the groups, but within a month or so, we will reach that maximum for all calculations. We will then be counting all profit as a percentage of our fixed maximum investment and the final annual returns will be a higher and correct representation of the annual return.
However, after March 5, 2019 we will reach 365 days and another variable will become fixed and we can then ignore this whole subject.Wednesday - May 30th 2018
How NOT to Trade your Account?
My lazy way to trade our Top-10 groups of accounts is a little different but offers a simple solution. It works if you are usually pushed for time, or perhaps if you are new to trading a group of stocks in a common account.
As you have seen, we many times have less than a full house of stocks due to some of them having been sold.
An example is trading all 10 of the Nasdaq Top-10 as I do in my IRA. We often own 7 of the 10 possibilities with 3 of them having been previously sold. This is where I have used a time saver.
If my cash from these 3 sales is $3,600 and I get a signal to buy one of them tomorrow, then I just divide my cash by 3 and buy $1,200 worth of the next stock. This is not my recommended system.
We normally suggest that when you buy back into a stock, you should use the same amount of cash from the previous sale of that stock to get back into your position. In this way, you are putting that same amount in to your winners as well as your losers.
This would be our recommended method of trading and I am wrong to ignore this principal. After all, when we make our selections, we always look at them in a best to worst order.
The large portfolios of investment managers that help us to make selections are divided into categories with surprising differences in values. Last month we found a couple of managers that are holding 60% of a multimillion dollar account portfolio in ETFs and 40% of that ETF total was in a single asset.
That represents about 24% of the entire portfolio was in a single ETF. So, if the big guys are going with their winners, we should do the same thing.
My quickie system will eventually spread my winnings equally but, I am wrong in mistreating my IRA this way and will go back to the preferred system ASAP.Tuesday - May 29th 2018
Inverse PAIRS TRADING with ETFs.
We have done considerable pairs-trading going back to our days with volatility before Credit Suisse took XIV off the market place.
The great benefit is the issue of all the inverse ETFs for most popular Indexes and segments and the great opposing correlation between the positive and the inverse trade.
The disadvantages are the management costs of the leveraged versions that are otherwise tempting to use, if those costs could somehow be overcome. Well, guess what! Our Algorithms produce profits from positive and inverse ETFs.
We have scanned and back-tested 100’s of pairs and as expected, our Algorithms performed as previously demonstrated. On bullish assets, they quickly tend to get out of strong negative moves and stay with the positives.
The result is with good correlation, even though it is in opposite directions, we can take advantage of the diversity in their moves. The net in many cases is profits from both sides of the trading.
We are starting with a selection of industries from Biotech, Natural Gas, Semiconductor and Gold Miners with a final pair from the Russell 2000 stocks.
You will see these ETF Pairs in the ETF Booster slot in the June selections as several of them are already in that ETF published data.Monday - May 28th 2018
New Ways to use our Algorithms.
Following the world of large investment managers is proving to be a great way to confirm selections of assets to form our Algorithm groups.
One of the great benefits is they represent high daily volumes which minimizes the bid/ask price spread when we make a trade.
Secondly, they represent broad universal opinion when deciding between large, mid or small-cap assets. This also helps the USA versus Europe or Asia decision that large portfolio managers need to know.
Our back testing has confirmed these advantages and has also pointed us towards broader uses of the Algorithms that we will begin to make available next week in the June selections.
The first benefit is in response to requests received to more specifically define a smaller selection of assets for you to follow. To achieve a new smaller ETF group of 5 assets, we have analyzed these managed investments to see what percentage of their portfolios is dedicated to which type of investment.
Consequently, you will now see this smaller group of 5 that we call our - ETF Prime Booster. We back tested the group but started the published data on March 5, 2018 so that easy comparisons can be made to all other selections. We will continue this trading forward from here.
I have added a chart here to show how well this Prime selection has performed with better than a 46% return in just 84 days. This translates to an annual profit of about 200%.
What you are seeing here is the wisdom of large portfolio managers made much more efficient by trading their positions through our Algorithms.
I keep mentioning this fact because it is extremely important to consider. During this period since March 5, the S&P 500 Index has gone nowhere.Thursday Special - May 24th 2018
How to Invest in Our Algorithms.
Yesterday I wrote that $500 investment in 10 average stocks selected from our entire range since March 5 this year, would have produced a 59% annualized profit so far.
Of course, if you had chosen the 10 Nasdaq stocks, your profit would have been more than 50% higher or greater than 90% annualized profit.
In either case, at our published monthly fee schedule, you would have also paid $1,140 to us from this $5,000 account so profits would have been 36% ($1,800) or 67% ($3,350) on the $5,000 investment.
Of course, larger investments would still pay the exact same commissions and fees, thus allowing much greater profits.
It is sometimes difficult to make the best selection of stocks from the 5 or 6 Top-10 groups, but I want to emphasize how easy it is to switch around from group to group or just select a mixture from several of the groups.
I reported earlier that I switched my entire selection in my IRA during May from the Total Top-10 group into the Nasdaq Top-10 by taking Sell signals in the Total group and Buy signals in the Nasdaq group. Loyalty to an investment is not required here.
All our published trades and results have been obtained in this lousy market for the last 3 months with the S&P Index going virtually nowhere. If we had started 6 months sooner, we would all be dancing in the streets, but we don’t know when the great markets will occur.
I am encouraged by our annual returns in lousy markets and really looking forward to better opportunities tomorrow or next month, whenever they return.Wednesday Special - May 23rd 2018
FTSE Replaced by Premier Selection.
Our new Premier Selection will replace the London FTSE Top-10 in June.
Added taxes do not help trading in London programs such as ours and we find UK investors often prefer to trade in overseas markets.
Our new Premier Group of Algorithms provides investors with a highly leveraged set of widely held as well as currently popular ETFs.
Equally important is their diversification, which comprises of a popular current range representing broad portfolios.
We recently received a complaint that commissions are not calculated in our Algorithms and here are the reasons we do not include them.
Our average stock or ETF trades are less than 15 buys and 15 sells in a back tested 12-month period. At Tradier Brokerage, 30 trades at $3.49 per trade would cost $104.70 in an average year per stock. It should be noted that Tradier is offering new accounts $200 or 60 days of FREE trades if you use the code – Roebuck200.
If you make a profit of $1,000 in a year from trading one stock, you would pay less than 11% in commissions. There are many different Brokers with many different fees.
We also have accounts with Interactive Brokers where commissions are much less but Tradier is a well-designed and simple online brokerage site and that is why we use them. We do not receive any financial benefits from your choice of Brokerage and we have no financial benefits or agreements with anyone.
We do recommend that you find a Broker suited to your needs, but it would be unfair to most Subscribers for us to include a commission that does not represent their situation. You can simply multiply by 30, your commission and the number of stocks that you follow to see your estimated total cost per year.
If you wanted to follow any of our current Top-10 selections with a total of $5,000 or $500 per stock, your commissions at Tradier would be 30 x 10 x $3.49 for a total of $1,047. This is about 21% of your initial investment and the average annual profit on all of our published Algorithms since March 5, 2018 is currently 80% profit. This leaves an average of 59% potential profit on a $5,000 investment.
As you have seen, the average annual return has been rising since March 5, as expected, and any larger account reduces the significance of commissions as well as our fees.
Our fees are roughly equal to the Brokerage Commissions on the smallest account.Tuesday Special - May 22nd 2018
Reading Our Charts – VTI.
I see these every day and probably take them for granted as they have changed and improved over 7 years.
VTI is a great example because it is one of the widest held ETFs in managed accounts today. It is described as a Total Stock Market with about 98% USA equities.
The red dots represent the Buy and Hold profit if you held it since May 23, 2017 and the green line represents our results after using Algorithms. We kept making profits while VTI lost much of the previous gains during the past 5 months.
This is one example of what Algorithms can do but if this only worked on one stock over a particular period, then it would be easy to duplicate.
I urge you to look at all the stocks and ETFs that we publish to see the excellent record that has been established. As you have seen, we publish ahead of our trades and have no way to offer tricks and make believe.
I have also disclosed that our Algorithms are run every day without fail. We take the very latest information into consideration and drop off the oldest date at the same time.Monday Special - May 21st 2018
Necessary Changes for Sectors.
GKN-LON is involved in an acquisition and had to be replaced over the weekend. AHT-LON has been added in place of it.
While we are making changes and due to low volumes, we are replacing FINU with FAS in the new Premier group. In this case FINU is a sale for tomorrow, so we will not buy the replacement FAS until we get a BUY signal.
Any Followers who may have a position in either of these should sell and replace them at the next trading day open. These are treated just like a normal exchange at the end of each month when we occasionally adjust the sector Top-10 groups as necessary.
By way of explanation, we estimate that an average of 1 or 2 stocks or ETFs in each Top-10 sector will be replaced each month because they no longer perform or need replacement for some other reason.
This process means that most of the selection could be replaced within one year. In volatile sectors, this is more likely whereas in more stable sectors, it may not be the case.
Month-end is the likely time that changes occur, and it just takes a simple sell and replace on the following trading day open.Friday Special - May 17th 2018
SEE the ENTIRE PROGRAM.
If you look at the History Data page right now, you will see every trade on every Booster since March 5, 2018.
It is 74 days or 11 weeks since we began publishing our trades ahead of time to demonstrate our Algorithms and their success rate.
During these 74 days, the S&P 500 is up 1% and our average stock from over 50, is up 18% with a current and improving Average Annual Profit of 89%.
Let me say that again to be clear – Average 89% Annual Profits.Thursday May 17th 2018
What are Premier ETFs?
Money Managers around the world are looking at the same data points that influence their investment conclusions.
How is Europe doing compared to the USA or compared to China?
Is China following the whole of Asia or is Asia more generally following China and who is manipulating their currency?
Morgan Stanley Capital International is often used in the name when you see MSCI in a description because Morgan designed many of the Indexes that specify a particular segment.
You often see EAFE associated with MSCI because Morgan also used it to stand for Europe, Australasia and Far East. It basically includes all these areas excluding the USA and Canada.
When Mutual Funds were the game in town, these standards from the giants in the investment community were useful in delineating trends and financial activity into various segments.
We search data to find what Investment Managers are doing but take advantage of the rapid growth of Exchange Traded Funds. They generally have the advantage of being cheaper to manage than your typical Mutual Fund, but they have the added advantage of leverage.
We find that using a broad consensus from Money Managers in choosing financial and/or geographical selections is an excellent basis for investment. Couple that with some leverage offered by ETFs and some Algorithms offered by Roebuck Systems and you have a great model for investing.Wednesday May 16th 2018
ETF and Banker Top-10 Selections Up.
All 10 of the Banker and ETF selections went up today which tells us that the smart money as well as the risk takers were investing.
There is a rule for every Market and you can go crazy trying to adjust your investments for whatever is the latest theory.
The reason I have ended up with Algorithms is precisely this fact. They take away those greatest and latest theories on where to put your money. Just give me the facts as Sgt Joe Friday used to say on TV.
I have added a preliminary chart to show you how we intend to break our Algorithms down to make useful and investable decisions from a smaller selection of opportunities.
We often hear that there is too much data on our website or too much daily information out there and it makes it difficult to decide what to invest in for the best results. I found that it was impossible to make the best decision because tomorrow brought some new fact or new idea that I needed to know more about.
Algorithms make all that decision-making jargon a lot simpler once you see consistent results and can logically believe in what you see. That is the reason for us to offer precise investment programs that are built on a long history of known factors.Tuesday May 15th 2018
Striving for Profits.
We started all current Algorithms on March 5, 2018 on the same day that we introduced them to the public.
Since then, 71 days ago, the S&P 500 has gone virtually nowhere for an annual rate of approximating 6%.
We introduced 50 Algorithms and traded them daily, representing a wide range of stocks and investments.
In those same 71 days, they moved up an average of 14% or an annual rate of 71% profit with the best selection of Nasdaq stocks near 150% annual profit.
We certainly chose a poor starting date based on Market activity, but it has been a great opportunity to demonstrate how our Algorithms keep us in profits during poor Market conditions.
The slowest group are the Banker Top-10 but they rose at a 26% annual rate of profit. At that rate, you would still double your money in less than every 3 years or about 830% in 10 years.
Yet, I said yesterday that we are going to introduce something better than we have seen in the past 7 years. I have great confidence in this statement because it represents a formula change that repeats itself in a range of assets.
I have already back tested and run these new Algorithms on real time data with great results and have a goal of June 1 for their introduction along with the regular monthly updates.Monday May 14th 2018
NEW Top-10 Fund Coming Soon.
Apologies for no Blog yesterday but I do have a couple of excuses. Mothers’ Day would be one of them and working on Algorithms when I should have been enjoying Mothers’ Day is the other.
Suddenly, there was no time for the Blog, but a new and improved fund will be the result in the coming weeks and I am anxious to bring the results to you.
I like the idea of someone more capable than me making some of the decisions and we plan on putting that into action in the next month or so with some very exciting results.
We are back to my argument that there is always a better way and the nice thing about mathematics is the numbers do not lie.
I fully expect the new Algorithms will produce greater results than we have experienced during the past 7 years and at this point, I intend to include it as part of our existing set of Top-10 selections.
It will most likely replace one of the current selections and I will give notice if that proves to be the case. It is difficult to replace something that is already making profits but when the technology and methods simply outdate previously published data, we just must use it.
One of the great advantages of all our Algorithms is the simplicity in following them and switching in between different Top-10 groups. I personally moved to the Nasdaq Top-10 recently by taking the SELL signals to get me out of previous stocks and the BUY signals to get me into the Nasdaq selection.
I also ran into the T+2 Banking Rule on a Corporate account and was restricted in trading for a day. I quickly changed the account to a Margin account which provides the extra cash on the few occasions that the rule kicks in.
It costs very little interest for the day or two that the extra cash is needed, and I prefer to trade on the signal day rather than stay out of a position.Sunday May 13th 2018
No Blog Today.Thursday May 10th 2018
A COUPLE of DAYS DIFFERENCE.
If you remember a couple of days ago, the ETF Top-10 was struggling due to the difficulty of owning them in down and flat markets.
What a difference a day makes! They are now #5 in the ranking and suddenly, they have a desirable annual profit and may catch up very quickly.
It always comes back to portfolio choice and your decision of what is best for your goals. A younger person has the time to be wrong (for a while), but if you are already retired, that luxury may not be available to you.
The middle of the road portfolio could be a selection of 2 from each group to get that spike that comes from leverage in strong markets. Obviously, your location may keep you in or out of the London markets.
20 years ago, or more, that leverage factor may have come from Options or perhaps Warrants or Futures but that required a set of skills that a lot of us didn’t perfect.
Another portfolio might be 5 from the Banker Top-10 which are also ETFs and is a selection from Fundamental Investment Managers together with 5 from the leveraged ETF Top-10. This could give you the confidence of expert selection advice combined with some of that leverage that looks so good.
Whichever method you choose, keeping an eye on that Banker Top-10 is always a good way of following the money.
By reading up on those symbols in the Banker group and the sectors they represent, you could then give expert commentary at your next Family Gathering!Wednesday May 9th 2018
GAMBLING or COUNTING CARDS?
My best session as a Card Counter was in the 1980’s in Monte Carlo when I walked away with about $7,000.
That is just about the time that shuffling machines began to come into favor and people like me had to rely on our careers. I am an Engineer with an inner risk computer and I use numbers and art to figure out solutions.
What you get with my Algorithms are fact-based calculations from many millions of iterations, which are always repeated every day, for each asset that we publish each evening.
So, what is the result? A better chance of being on the right side of an investment than being on the wrong side.
What I can tell you is you will have on average each day, somewhere between a 55% to 65% chance of being right in the long run. In fact, it is probably more like Card Counting in that I can only guess which card will turn up tomorrow, but I can calculate which cards are more likely than others.
I am risk averse and my inner computer told me to give up Card Counting when it was no longer a winning strategy.
What else should you know? GIGO is a computer term that I first heard early in my career when I worked on production scheduling. Garbage In – Garbage Out was a very simple warning to avoid Garbage.
If we feed the wrong data in, then we will get wrong answers, so the key is to find as much relevant data as you can and let the computer make the decision for tomorrow. I cannot currently tell you if it is a 51% chance or 65% chance, but I can tell you whether it leans to a Buy or a Sell and in the long run, I will be correct.
Finally, you should note that these basic Algorithms, with small changes, are producing positive results from all trading assets that we publish. They range from conservative to highly speculative assets. Tomorrow will be different than today but so far, we have not found a back test that does not benefit from our methods.Tuesday May 8th 2018
There are ETFs and there are ETFs!
The ETF Top-10 Booster is struggling to stay ahead of the Markets these days and quickly gives up any gains it makes in these volatile times.
The reasons are explained by the 2x and 3x leverage that these types of ETFs are designed for. This would be great if there were no severe penalties for us to pay for that leverage.
The use of Options to get the leverage introduces extreme time decays every day by them having a fixed strike price and date of expiration in the future. This becomes a cost of ownership and a daily loss.
In addition to this daily loss, there is a large management cost involved after every market close, to re-adjust the quantity and variety of options so that they will open on the next trading day with their particular leverage value and contract.
All these costs are overcome in a trending market but become more difficult to overcome in a flat or volatile market.
This is not true with none leveraged ETFs that are represented in the Bankers Top-10 Booster and many Investment Managers prefer to use these ETFs rather than Mutual Funds because the management costs are about 1/2% cheaper and can give them an edge in competition.
This 1/2% gives all of us the same advantage. Remember that Mutual Funds have annual management costs in the 1% to 2% range and this expense can make a big difference in large portfolios.
These savings are one of the main reasons for the fast growth of the ETF industry over the past 10 years or so and why we see them represented in major portfolios. An earlier version of them is the SPY which represents the trading values of all S&P 500 stocks in real time values.Monday May 7th 2018
How to Begin.
We suggest you start with the “Bankers Top-10” because they are the investment of choice by many International Investment Managers around the world. This group of assets trade more than $10 Billion dollars every trading day.
We also suggest you start with a minimum choice of 5 assets with $800 in each of them. Otherwise, if possible, available capital should be equally invested in 10 assets and profits from each re-invested in itself at the next BUY Signal.
On the first day, you should BUY only those “Bankers Top-10” assets that have a BUY signal and from that day forward, BUY or SELL at each new signal change that you receive from us.
These trades should always be placed at the “Opening Price” on the next trading day. Your Broker may call that a Market Order which can normally be placed any time before the Market opens for the next business day.
As you gain experience with our Algorithms, you can move further up the potential profit list of assets.
That’s It.Saturday May 5th 2018
CHANGES for the BETTER.
Always looking for a better and simpler presentation, we added the Total Top-10 selection to the bottom of the 5 basic sector groups, putting everything on our new Chart number 4A.
Also, Chart 1X has been simplified by eliminating the gain over the local Index.
We now simply look at the Booster profits over the Buy and Hold strategy for each stock and group and rank their current results.
I do want to caution you that some of these leveraged ETFs can be stressful.
On the other hand, the Banker Top-10 are also Exchange Traded Products, but at the opposite end of the spectrum.
Having spent so much time with these Algorithms for 7 years now, I think our decision to leave the DOW in with the S&P 500 and then to create this Banker Top-10 Booster has looked good to me from the start.
It combines the knowledge of these top-level Investment Managers with their need to compete. Our Boosters offer a unique new ability to stay out of down moves and sharp reversals. They combine their skills, creating huge volumes with every known fundamental analysis method to stay at the top. They then look for an edge to make that extra percentage that can set them apart.
Our Algorithms can be that edge. Their potential gain based on back testing is currently 242% or 142% profit from Chart 1X with an actual annual profit since March 5, 2018 of 25%. This profit from a Market with an S&P 500 that has moved down -0.7% during the same period.
These are dazzling results for an industry that struggles to get 8% to 12% longer term annual profits for their clients. Not so dazzling when compared with the Nasdaq annual profit of 136% for this same period but so much less risk for moderate to conservative investors.
What I like to see is the strait line graph of this Banker Top-10 Booster which could be a strong indicator of future performance.Thursday May 3rd 2018
IMPORTANT INDEX REFERENCES.
London stocks according to the FTSE Index at Plus +6.1% are doing far better than our S&P 500 Index at Minus -1.9% since March 5, 2018.
All our published Sectors were started on March 5, just 59 days ago and you would expect USA stocks to be doing far worse than their UK cousins, but not so.
The Nasdaq selections are performing at an annual gain of 139% which is over 4 times that of our S&P 500 selections at 32% which itself is a great result. This is during this past 2-month period when markets here have gone down.
We have reported on the high tax that investors pay when trading stocks in London and one of the surprising aspects is the Electronic 0.5% Stamp Duty Reserve Tax payable on purchase of shares. When added to Brokerage fees, this puts a damper on any trading accounts.
At Tradier Online Brokerage where we keep accounts, we pay $3.49 plus a few cents tax on each trade and then I assume we all worry about income taxes after that.
Our new Chart 1X is a recent addition to make it easier to select which stocks or ETFs might be preferred investments. This is where you see the above sector performances.
Conservative investors will see and should consider the new Bank Top-10 selections from the Investment Bank world. This selection is showing a potential improvement on a Buy and Hold strategy to be more than 200%.
Current performance since March 5 for the past 59 days is 5.0% or an Annual Return of 18% and I need to state once again that we are in a negative market since that date.Wednesday May 2nd 2018
INVESTING and SPECULATION.
Recent interest by Followers spurred our change to add strong investment opportunities to our Top-10 lists.
Although the DOW stocks are also listed in the S&P 500, they did represent a very popular group of assets even though only Boeing currently survives in the S&P 500 selection.
However, the improvement of replacing the DOW by the Banker Top-10 offers Conservative Followers more and great longer-term opportunities in well-chosen assets by experts in the field. This Banker list trades over $10 Billion daily.
As many of you know, the ETFs that work so well with our Algorithms over the longer term, do fall into a more speculative category and our goal here is to offer something at the conservative end of the spectrum.
For about twelve years, I have had the opportunity of working with several of the major money management Banks through my relationship with an ESOP or Employee Stock Ownership Plan. This is precisely where this Banker Top-10 idea comes from and it is surprising how many of these Money Managers are selecting the same assets in their portfolios.
My $10 Billion per day value comes just from the major USA listed stock market trades each day but our selections are made from major investment managers around the world.
This is a good time to repeat the Rule of Seventy Twos which I learned many years ago. If you divide 72 by your annual interest rate, the result is how many YEARS it will take to double your money.
Conversely, if you divide 72 by the number of years to double your money, the result is the annual INTEREST RATE that you need to accomplish your goal.
Of course, you young folks can keep doubling up this number to become extremely rich by the time you retire.Tuesday May 1st 2018
BIG CHANGES TONIGHT.
I think everything was updated by tonight, but a few stock charts may take until tomorrow.
One correction to make is my comment yesterday that the new Bankers Top-10 would trade less than other groups and I should have said more. They will average 4.5 trades per stock versus the average of 3.2 trades per month.
The graph of trades of the Banker Top-10 since March 5, 2018 does appear to be a smoother rise and that may well be associated with the huge volumes of those investment manager favorites.
Our Subscription Service begins today although all Subscribers will receive our FREE 30-days before billing at this time.
Today is also the day that we make any changes to the Top-10 selections in each group for the current month, but few were necessary, and we expect changes to be approximately 10% or an average of one change per group in future.
Followers will sell any stock that they own if it drops off their portfolio and replace it with another preferred asset. These changes should be made at the Market Open on the next trading day.Monday Apr 30th 2018
BANKER Top-10 REPLACES DOW.
The Banker Top-10 replaces the DOW Top-10 tomorrow. As indicated, the DOW are now included in the S&P 500 Top-10. Final selections for each group will appear tomorrow for the month of May.
There were a couple of changes during April, but our goal is to leave each selection at least for the entire month.
Even though our selections are made based on the statistics alone, there are situations such as price spikes for takeovers that have caused glitches in the groups.
The new Banker Top-10 is designed for those Followers who tend to stay with Asset Manager choices and we expect that group to stay more consistent.
Our Algorithms are working well with the Banker group with above 116% improvements on average for all ten.
Because of the extreme high volumes in this selection, the charts will show a more common ability for them to stay with trends and eliminate downtrends. With about 20 round turn trades each year, the recent activity shows about an 18% or 65-day average cash position for each of the 10 assets.Saturday Apr 28th 2018
CHANGES and IMPROVEMENTS.
Remember me saying there is always a better way? Well here it is . . . .
Although I began these Algorithms by testing the DOW 30 Industrials, it has become evident that they no longer serve our current goals.
As the DOW 30 Industrial stocks are also in the S&P 500, they are already included as part of the S&P Top-10 selection and are a part of our monthly sort. We think we can offer a better service and variety.
Their replacement will be a group of the world-wide Top-10 favorites from the largest and best money managers. So, if you want to do better than your favorite Money Manager you should check these out.
One of our sources from these Money Managers is JP Morgan Asset Management and they currently manage more than 1.64 Trillion Dollars and have offices in more than 30 countries.
According to Paul Merriman and Richard Buck in a Market Watch article, the past 80 years have produced average returns of 9.7% to 12.7%, depending on your choice of Small-Cap to Large-Cap stocks.
Liz Davidson reported in Forbes Magazine that 11% return is difficult to maintain over a long period. It all depends on timing, fees, trading costs and of course, Uncle Sam will want as much as 35% of your profits.
That is where our Managers Top-10 Booster Algorithms can make the difference. These are 10 of the most widely used assets in the professional management of large and institutional portfolios and they appear in many of these portfolios for long periods of time.
Daily turnover is about $10,000,000,000 each day.
Our Algorithms average about 20 round turns each year for each of the 10 assets and our 1-year potential return currently stands at about 26% or better than double their current return.
We will include this new Top-10 group from major Asset Managers in the next few days.Thursday Apr 26th 2018
ADDED Columns to 4T Chart.
We added 2 additional columns to the 4T Chart at the bottom of the Total Top-10 Booster Page.
This puts more data in one place for Followers and the first addition is the potential Days in Cash for each individual stock.
The second Daily % Gain represents the potential gain each day that the stock is owned.
These are calculated from the Algorithm projections and do not come from any additional data or input.
All input to the various charts is derived from statistical evidence even though it may be from different time periods. It is combined to find the best day to buy and to sell.
We determine that based on the evidence that we analyze over the past approximately 6 to 18 months, that best day is tomorrow at the Market open. We then calculate and show the evidence with precise results obtained over the past approximate year.
Years of testing shows us that we can effectively use that evidence today and into the future, but we recalculate everything again after Markets close every day. It is not surprising that a few changes do occur since yesterday but relatively few and that is why our lists of Top-10 will only be changed every month.
In the past, we have made changes during the month, but only special situations will cause us to do that. If it happens, we advise to sell when a stock is removed from the selection and the replacement stock or some other stock in the group be selected.Wednesday Apr 25th 2018
WHY BUY or SELL on the FIRST DAY.
Yesterday I referred to some comments about the new T+2day Banking Rule that replaced the T+3 Rule last September.
Unusual volatility and higher turnover of stocks can still run into this rule.
Today I want to emphasize some facts about our Algorithms that may help your choice of when to buy and which assets to buy when a signal is given.
Our Algorithms are designed around the best day to buy or sell assets. Historically, the day they change their signal, produces the highest result.
Also, these signals have produced profits at about 65% of the time on that first day and all other days are less.
This is the main reason I mentioned yesterday that if you need to buy 3 stocks and you only have available cash to buy 2, I personally would buy all 3 of them in smaller quantities. This is solely based on that 65% number.
If you want to further refine this decision, you could look at the number of potential trades listed for each stock to judge the average length of ownership. Longer ownership could indicate a steadier rise rather than a more volatile rise. You could also deduct the Days in Cash to try to be more mathematically correct.
This is not a precise science but a stock showing fewer buys and sells is likely to be moving up on a more regular basis than a stock which relies on many trades to achieve a similar annual return.
It always helps to look at a chart of the stock to determine whether the recent gains are by a steady upward performance rather than a sudden spike that may indicate some actual or rumored activity such as a takeover or positive news item.
Finally, we changed our format to listing stocks of each Top-10 sector to alphabetical rather than the performance of each individual asset.
After receiving comments about this, we have added a new Chart 4T at the bottom of the -Total Top-10 Booster- page showing all sectors in order of potential results after using our Algorithms. The background colors identify the sector that they come from.Tuesday Apr 24th 2018
T+2 RULE & OBSERVATIONS.
This volatility in our Markets may well have you worrying about the T+2 Banking rules when you quickly buy and sell stocks and find a shortage of cash in your account.
We were discussing this today and thought it probably affects a few Followers as well.
Basically, if you don’t have excess cash in your account and if you sell a stock today, you can use the proceeds to buy another stock. However, the money from the sale today is not settled cash for 2 more business days.
That means you cannot sell the new stock that you bought today for the next 2 business days because you did not use settled cash to buy it.
Put another way, the cash from the sale is not in your account for 2 more days because it must go through the Federal Banking System before you can receive the credit for it.
If you were to try to sell this new stock within those 2 days, you would be selling something that you did not theoretically own yet. It can get a little confusing at times and usually when you want to sell something quickly.
The problem is leaving extra cash in your account for the few times this happens is not helping you to maximize your annual gains as it reduces your percentage annual gains.
Along these same lines of discussion, if you need to buy 3 stocks and you only have available cash to buy 2, I personally would buy all 3 of them in smaller quantities.Monday Apr 23rd 2018
LONDON UP AGAIN.
The London FTSE 100 is making much better progress on the upside than the US Markets.
Now up over 8% since March 5, this equals the return of our S&P 500 Top-10 but less than half of the NASDAQ Top-10 which currently stand at 18.4%.
The Total Top-10 Booster is slightly ahead of the S&P 500 at 8.4%. All these gains are happening while the S&P 500 Index is still in negative territory for the same time period. With world leaders heading to the White House this week perhaps we will see some gains.Sunday Apr 22nd 2018
CHART 1C is WORTH LOOKING AT.
The new Chart 1C at the top of the Home Page and here is worth looking at for anyone comparing our performance.
I had this question this week and Chart 1C is a good item to watch every day.
Check the performance of our average profits compared to the performance of the S&P 500 Index over the same period.
As of Sunday, in the past 48 days, we are up 53.6% while the Index is down 3.1% and only the ETF Top-10 slowed us down.
This certainly gives you a warm and fuzzy feeling in this slow bear market, but the ETF selection needs some further explanation. We include 3x and 2x Leveraged Exchange Traded Products in the ETF group and they certainly are risky but offer superb performance in more normal times.
You just have to look at their Group Potential of 227% Annual Gain after our Algorithms to appreciate the relatively small negative return today.
At the end of April, we hope to publish a complete set of charts for all our selections and you will then see how their individual performances behaved in periods of negative movement.
I also commented that our Algorithms have been back-tested to 1990 which was the start of the VIX Volatility Index. This period covers the Financial Crisis of 2008 onwards.
Finally, I just must comment on the statistical nature of our selections. By themselves, they represent the Top-10 selection in each group that we offer. In turn, the selection is made from a basic number of 30 stocks in each group. This came about because the first group we tested was the 30 DOW Industrial Index.
We kept up the statistical selection of 30 stocks in all groups and have then selected the 10 that best fit our Algorithms and screens.
It is highly unlikely and statistically unreasonable, that our methods have produced 5 groups of 10 stocks that are below average, and I think the data that we publish ahead of the trades each day is convincing.
Free access to all trades continues until the end of April, and a further 30 days of free membership after May 1, 2018 applies to anyone who signs up at any time.Thursday Apr 19th 2018
No Blog Tonight.Wednesday Apr 18th 2018
HOW WE MANAGE OUR ACCOUNTS.
Newcomers to trading a managed account may benefit from these tips that we use on our own accounts.
First, we establish our total commitment to invest in a Roebuck Systems group of stocks. We will use an example of $10,000 and 10 stocks, so that we invest $1,000 in each stock.
Assume we have 8 buys on the first day, then we buy $1,000 worth of each of the 8 stocks at Market Price on the next trading day open. We use the closing price of each stock to decide how many to buy.
We also round out the number of shares we buy to the closest number above or below the $1,000 unless we are at our maximum of 10 stocks.
In this case for the tenth stock, we use 98% of remaining cash available in our account because the value of the share can change overnight and this gives us a 2% buffer in case the price goes up before the next day open.
We hit the Trade Button to place these orders and wait until the next weekday evening or Sunday evening when we receive the next Buy and Sell signals.
Different Stock Brokers deal with placing orders in different ways and Tradier has a large Green button to place your orders. However, if you are simply selling a stock that you already own, you can click on the Button to the right-hand side of the - Stock Positions - which says – Close Position.
So now, we place the sell orders. It is possible that one or more of the stocks you must sell are those that you bought today so do not be surprised by that.
Now we must consider the T+2 Banking Rule which tells us we must wait 2 business days before the money from stock sales is available to buy more stocks. This is due to Banks having to move money through the Federal Banking System.
Tradier Brokerage handles this rule for us when we click on – More Balances – and it tells us how much - Settled Cash - is available. Assuming we have sufficient cash available, we next look for any Buy Orders that must be placed.It's easy!
- Signals arrive each evening and should be taken on the NEXT TRADING DAY OPEN.
signal should always be taken the FIRST day it appears but may be taken anytime.
signal should always be taken the FIRST day it appears but may be taken anytime.Tuesday Apr 17th 2018
Advertising has Started.
Now that we have the Algorithms tuned and operational, we have started a more aggressive advertising schedule.
We plan to remove signals from the various charts on May 1 and continue sending signal details to our Subscribers after that date.
Many Followers are still with us from our volatility days and I know these new Top-10 groups will continue the quality of signals that we have previously published. Please keep the questions and suggestions coming as we always learn from them.
Subscribers should sign up a day or two before May 1, when subscriptions will begin in order to get your details onto the Email and/or Text lists.
A question came in concerning how the various Top-10 lists are chosen.
Using the S&P 500 as an example, we run lists of all 500 stocks and look at their details and performances over two years of history in as many as four different time periods and we then make our first selections.
This results in a short list of thirty stocks which are then run through final Algorithms to ascertain the Top-10 for the S&P 500 group.
This is repeated every month to add or eliminate any changes that occur and that is when you may see a slightly different selection at the start of each month. A change can occur on any day of the month, but this is usually on the My Top-10 Chart or the newer Total Top-10 Chart that includes all Selections including London FTSE 100 stocks. This is when you would immediately SELL a stock on the next trading day OPEN and replace it with another choice.
At this same time, you can choose to add the new replacement stock or a stock from higher up one of the groups. You could also choose a stock with a new BUY signal. This obviously depends on your own choices and portfolio decisions.
At Roebuck Systems, we are buying and replacing every stock in each Top-10 group without making individual decisions that various Subscribers might choose.
You may decide to invest in the top 5 each month or some more traditional way of making your decision. This could most likely and hopefully produce better results than our published Top-10 portfolios. Many of you are choosing a selection from more than one group or from all the groups according to personal preference.
Our goal is to find a small selection of 10 stocks out of each group and with the help of our Algorithms, enhance the performance as much as we are able. By checking and sometimes changing our choices twelve times each year, we fully expect that the portfolios will be different from year to year so that we stay with current performers.
We are excited at the results being achieved with the past 2 years of our selections. We find that history beyond 2 years has little performance or predictive value to our methods of research even though we have done back-testing to 1990.Monday Apr 16th 2018
DOW, S&P, Nasdaq, ETF & FTSE.
Finished with the updates after correcting a couple of errors this morning. You can now see a wide range of currently trading Top-10 selections from the above assets including London FTSE stocks.
As it turns out, the Nasdaq Top-10 has performed very well for us in this mostly down Market since March 5.
I certainly hope that this range of 50 stocks gives you the broad range and diversification that you seek for adding to or creating a great portfolio.
In every case, the Top-10 is continuously selected from the highest performing stocks in their group looking backwards up to a maximum of one year. If changes occur, they will be made at the start of each month.
In our accounts we will sell any asset as soon as it drops off the list of 10 and replace it with another stock from higher up the lists. In this way, we will actively maintain a maximum of 10 stocks in each portfolio for all 5 groups.Friday Apr 13th 2018
Preparations for NASDAQ and FTSE.
We have completed our preparations for adding the NASDAQ and London FTSE stocks to our Top-10 Booster selections.
Our Friday texts and emails are now distributed on Sunday evenings ready for Monday trading. However, as we progress over the weekend, you may see additions to the website.
Those Followers who trade in the London Markets will know that prices are quoted in Pennies or Cents in the UK and we will follow that practice, even though USA traders are used to Dollars.
Just remember that 2,000.00 pennies or cents looks very expensive, but it is really about $29.00 in US money.
Another quirk to note when looking at the NASDAQ Boosters are the high gains both before and after trading with our Algorithms and this also applies to any asset that has a high normal annual rate of return.
An asset that is returning 100% or 200% annual return or more is likely to be improved less by our Algorithms. It may only be improved by a 40% or 60 % increase. It will most likely still be a better overall investment when you compare your potential annual returns but the stock itself is contributing a larger percentage of the gain.
It comes down to that old problem of looking for low priced stocks and deciding they have further to go whereas an expensive stock may still be the better investment.Thursday Apr 12th 2018
NASDAQ and LONDON Top-10.
We continue with this volatile Market and today was UP. I have mentioned in the past how placing all orders for the next day Open can work against us.
Not always so! When the Market points down and our signal indicates a SELL, quite often, with this Up-Down volatility, when we place that order tomorrow, the Market reverses at the open and we SELL at a higher open.
The opposite also occurs when the signal tells us to make a Buy for tomorrow, and we end up with a great lower Buy.
I have often mentioned the old calculation that we lose about 15% per year by ordering tomorrow as opposed to watching the Markets all day long.
That is in fact an old calculation and goes back over 2 years when we were concentrating on trading volatility using the now defunct XIV as well as VXX and UVXY.
The exact percentage lost importance when it became obvious that we could easily beat my first goal of a 30% annual return and quickly moved beyond 60% and subsequently now, well over 100%.
The heading today refers to a recent question I received about the NASDAQ stocks and why did we not include them. I was deeply involved at the time in working towards the London Markets and indicated it would come later.
What changed was this 0.5% Tax question for traders in the UK on top of generally higher brokerage fees. I am no longer confident that many Followers would be trading them as this fee is significant. However, having almost completed that work, my intention is to add a FTSE-100 Top-10 and then add a NASDAQ Top-10 at the same time.
Unfortunately, due to the larger quantities of NASDAQ stocks, the selection will be from the large and the midcap stocks and will not include those with smaller capitalization.Wednesday Apr 11th 2018
S&P 500 Top-10 Stays Ahead.
The S&P selection is staying in first place these days and probably will continue there until we see a few more days string together on the upside.
Very little help from the Indexes today but there is evidence of individual stocks making their own headway and not being distracted by the news that we discuss all the time.
Good stocks will always do well and beat the news cycle in the long run. Our Algorithms for the S&P 500 confirm this and are offering much better than average returns.Tuesday Apr 10th 2018
A Good Day at the Races.
The DOW came racing back today and we quickly moved into a positive result, as did all the Algorithms.
Today was a good demonstration of how fast this can happen, and we do not have to reach previous highs in the Indexes to demonstrate great returns for our Followers.
I had a good set of questions today and one of them related to the London Markets. The factor that moved that idea a little lower on our schedule is the 0.5% tax on trades. It surely takes a slice out of profits for London accounts.
I have not figured out the pain that 0.5% would put on an average account but it seems like enough to open an account elsewhere if possible. I believe that would only apply to a sale of stock and not the purchase, but it still adds up on top of brokerage fees.
Perhaps somebody from the UK could send us a more complete picture of these affects. We are fortunate in the USA to have very low brokerage fees and small taxes directly on trades and perhaps investing with a retirement account would limit these costs.Monday Apr 9th 2018
High Daily Volatility Favors S&P 500.
This elongated period of daily surprises does not fit with leveraged assets or small databases, but it does fit the S&P 500 with a wide range of assets.
ETFs suffer initially by the delayed signals to trade on the opening of the next day. Secondly, their high Leverage works against high daily volatility unless the signals are in real time.
The DOW only has 30 possibilities and lacks the benefit of the S&P 500.
We have back-tested a full S&P 500 Top-30 and offer it here for you to confirm.
500 choices give us the benefit of a selection that includes stocks that have good current performance immaterial of political periods of high daily changes in direction. How many times have you heard that the Trend is your Friend.
Yes, our timing was not the best to start a new service and yet the performance of Mathematical Algorithms is measured by the difference between our trade signals and the INDEX that represents them, so let me demonstrate a good way to see that.
I assume that our signals and the S&P 500 Index started on March 5, 2018 with zero difference. The Index opened on that date at 2,681.06 and closed on Friday April 6 at 2,604.47 for a loss of 76.59 for the period. That is a 2.9% loss.
Our S&P 500 Top-10 closed on Friday at a 2.7% gain giving us an increased performance of 2.9% plus 2.7% or a total of 5.6% improvement over the Index in a down Market in 1 month. That is the equivalent of 67% annual return.
So, what is a reasonable conclusion?
The entire list of 500 stocks on average without any choice have lost 2.9% in the last month but we don’t invest in average stocks. We first select statistically, from the better performing stocks and then statistically again, signal what they will do tomorrow with about a 60% to 65% accuracy.
ETFs will do better in the long run because they have 2x and 3x leverage and Markets have been generally pointing up for several 100 years but that same leverage is painful on the way down. It could change tomorrow, and we will eventually catch on to that fact.
For the different reason of lack of choice, the DOW 30 stocks are underperforming the S&P 500.
So, we are back to the Trend is your Friend. We ran the S&P 500 Top-30 over the weekend to give support to these findings and it closed on Friday with a gain of 4.6%. That is a 7.5% improvement over the Index in one month or a 90% annual return in a down market.Friday Apr 6th 2018
Trade Wars and Markets.
European Markets lost about 0.3% and Chinese Markets went up about 0.5%.
American Markets lost more than 2.3% showing that the general investing public here are not thrilled with trade wars today.
Hope is not a winning strategy, but we must live with hope for the present.
Our profitable S&P 500 Boosters ended yesterday 4.8% ahead of the Index and they ended today about 5.0% ahead of the Index so we moved in the right direction, but the Markets did not.
We invest in those things we can control and try to ignore those that we leave to others. Timing is a difficult problem and starting the current accounts on March 5 turns out not to be ideal.
However, 5.0% ahead of the Index in one month is a great place to be when the Index moved down 2.8%. As noted, the S&P 500 gives us a wide range of stocks to consider whereas the leveraged ETFs have given up ground.
Even the DOW 30 is not enough stocks to withstand this current spell of volatility and Index losses and leaves the S&P selection as the one outstanding area of investment. Since March 5, the S&P 500 Top-10 Booster is currently showing a 27% annual profit which itself is well below a normal projection.
The Booster Next Day Trades will in future be sent out to Subscribers and Free Trial Members on Monday, Tuesday, Wednesday, Thursday and Sunday evenings.
This Sunday it will show 10 Sells, mostly in the Leveraged ETF selections, further indicating a good time to step back to the sidelines.Thursday Apr 5th 2018
Shear Volume Favors S&P 500.
500 of the most well-known Companies in the S&P Index have a large numerical advantage over the 30 DOW Industrials.
We get to select only ten from each group which gives us a much larger number to pick from. Not surprising then that the S&P 500 Top-10 are the best performers so far, simply due to the large number of available stocks.
ETFs are going to behave differently because of the high leverage that affects most of them. Their construction methods use large numbers of Options for each stock to obtain the leverage.
Balancing takes place after the close each day so that the next day opening price will move at 2x or 3x the movement of the underlying stock.
Options at set strike prices will move much faster than the stock price depending on how far away the option strike price is from the underlying stock price. Calculations are then made to represent the leverage needed for the ETF but those calculations only last for a short period of the next trading day.
It becomes extremely complicated to follow exactly because many options at different strike prices change values at different rates.
On top of the pure relationship change between strike prices and underlying stock prices, there are 2 more factors that will affect the leverage ratio as the day progresses.
The first of these is the Volatility of the underlying stock or on the overall Market, which can pump up prices or reduce prices significantly in just a few minutes or hours.
The second of these is the Time-Value of each individual option. The value of an option which is set to expire next week, will move much differently than the identical option that may have 3 or 6 more months of life before expiration.
The calculations and adjustments that must be made for each ETF every day, just to produce the advertised leverage, bogle the mind. Even if the underlying stock were to close at the exact same price as the open, a completely new set of options would be needed to produce that leverage for the next day due to the Volatility and Time-Values.
With all that said, leverage in either direction can be good or bad, but it introduces a level of risk that must be considered. This recent down move produced greater losses in this group just as it will produce greater gains when the market turns up again.
Finally, the My Top-10 Booster contains a few none-leveraged stocks from the S&P 500 Top-10 group and this will place a smoothing factor on losses and gains compared to the pure list of ETFsWednesday Apr 4th 2018
A Question on Duplicates.
All 30 DOW Industrial Index stocks are also in the S&P 500 stocks and duplicates will occasionally appear in our Top-10 selections.
An example of this was ADBE which moved up into the bottom of My Top-10 selection in April when we already owned it because it was already a buy in our S&P 500 Top-10 selection.
Confusing – yes, but some traditional as well as statistical based followers could read that as a positive for ADBE, whilst some followers might see it as needless duplication.
BA (Boeing) has been a duplicate for some time as a good performer but was also affected greatly by the sudden tariffs on Aluminum in early March. As stated yesterday, our selections are strictly based on the potential annual return after applying our Algorithms.
A stock that is performing well with a gradual increase in price such as Boeing, may not always be improved as much as a slowly rising stock but the final return of Boeing PLUS the Boost by our Algorithm can still be the best position to hold.
Our selections are based on the best overall performance which includes the stock price plus the added potential that our Algorithm improvements offer.
We see a lot of losing stocks turned into profitable stocks simply because we tend to remove down moves and stay in while they are moving up but not many of those appear in the Top-10 selections.
One of the great benefits of a small monthly change in our Top-10 selections each month is our ability to move with the times and with popular trends. Just one new addition each month can completely offer a different selection as a year goes by and that is what keeps our statistical choices in the best potential performance areas.
How many times have we all looked at lists of best growth or lowest Price-Earnings Ratio stocks, only to be disappointed by our own personal selection from that list.
Our purely statistical selections can find those stocks that have in fact already delivered some good performance and show a likelihood of following their path for a while longer. If they do not perform, they soon drop from the list and we move on to more fertile selections.
Our stocks from DOW and S&P are reported all day long in the Market Statistics given out by almost every financial news source and have been there for many years.
We add to that, a selection of the new ETFs that offer the more risk-oriented investor a place to invest. We then offer My Top-10 which is simply a compilation of the 10 best all round potential performers from other lists.
These last two groups will perform poorly in a down Market but offer much greater performance in up Markets simply due to their built in Leverage and longer-term risks. Whereas Corporate stocks most often have an Investor Page on their website, ETFs have a Prospectus Page detailing their management methods, construction and risk levels.Tuesday Apr 3rd 2018
A Conversation Worth Repeating.
Sometimes I am not seeing the obvious and questions are very helpful to me.
My Algorithms are the result of a purely statistical background based on many years of trying to invest in almost everything. I do not do traditional analysis, PE ratios or industry selection.
Everything is a numbers game for me.
However, you can apply your own ideas and select which stocks or ETFs to follow or you can be a statistical animal also.
For instance, we have a great selection of opportunities to choose from.
Whatever your method for selecting assets to follow, some knowledge of stocks that offer a better future is certainly a benefit to feeling good about which Algorithm might work for you.
On the other hand, 2 or 3 selections from each group could also be a good statistical way of rounding out a personal portfolio that is more to your liking.
The important piece of information for you to know is that we have used pure statistics to make our selections and we do not read the Wall Street Journal every day to influence these choices.Monday Apr 2nd 2018
New Booster Algorithms.
Welcome to our Booster Algorithms and to our daily service and free 30-day trial.
Not the best day to start although it is better to begin when Markets are down rather than at their highs.
You will receive our signals every evening with all the Buys and Sells on the three groups of Top-10 DOW, Top-10 S&P 500 and Top-10 ETF products together with My Top-10, which is made up from the 10 potential highest returns from all three groups.
The Top-10 S&P 500 is performing
well in the current Market and the leveraged ETFs are struggling below the S&P 500 Index. This is typical of these leveraged ETFs and should make up the difference as Markets become more related to performance as opposed to the daily news cycle.
Our number 2 charts detailing the real performance since March 5 will be found on the History page of our website and we always take all trades on all assets as indicated by the daily signals.
The 12 months back test for each asset selected can be found on the individual Top-10 page.
Finally, the number 1 chart has the current Top-10 selection from each group and is sorted by the potential return after applying the potential gains after applying our Algorithm.Sunday Apr 1st 2018
New April 2nd Trades at the Open.
Following a large number of Sells recently, it looks like we are reversing that position on Monday morning with a large number of 23 Buys and just 4 Sells.
Leveraged ETFs tend to be very volatile and they are a significant portion of the trades.
Our FREE 30-day trials start tomorrow evening and these signals will in future be received by our Email and Text Lists of Followers each evening.
Notice the color coding to more easily follow the 4 main groups of Top-10 selections.Saturday Mar 31st 2018
Revised Top-10 Selections for April.
As previously mentioned, we expect to review and change the selection used in each Top-10 group every month if appropriate to our Algorithms. You will see any changes today.
If a previously listed stock or ETF is no longer in the Top-10, we will Sell it and BUY the replacement if a buy signal is indicated.
Our Top-10 trading logs take all signals from all listed selections with no preferential choice and you may well have different results depending which of the selections you choose to trade.
You will also see some new numbers on our trade logs representing the Investment. First is the total amount Available for trading the 10 selections. In most cases we currently show $2,000 for each with a total of $20,000 for the group.
The next number is the Maximum Invested from the $20,000 total. This allows us to calculate the Profit from that Maximum Investment so that our Profit Percent can be related to the investments made to date.
You can also see the results on the graph along with the relative position of the Index that best describes the Markets.
Finally, My Top-10 Booster is a selection of the highest returns demonstrated by the other three Top-10 groups of Algorithms. In other words, it is the top 10 of the other 30 selections in the Top-10 DOW, S&P 500 and ETF groups.Thursday Mar 29th 2018
FINALIZED MANY DETAILS.
Bounced back today staying well above the Market Averages.
It probably is a good idea to mention our Broker again even though we have no financial relationship with them other than having a few trade accounts.
They are offering 60 days or $200 of free trading to any new accounts that use our code of ROEBUCK200.
I mention this because my brother in the UK reminded me of the tax that is levied on every trade which really punishes short term trading.
Tradier charges $3.49 per trade and is a very friendly website for followers of our Algorithms, especially as we make all trades at the next trading day opening price.
On their site it is classed as a Market Order that can be placed any time after the previous day close and the next day open.Wednesday Mar 28th 2018
I MADE AN ERROR.
These up and down again markets have problems of their own and we are dealing with them, but start-ups have their problems too.
In the D2, S2, E2 and M2 charts my formula that creates profit percent and the trading log each day had an error and we were regretfully reporting incorrect numbers. The real numbers are not so bad so that makes me feel a little better. They are now correct.
Tonight, since Mar 5th the DOW is down 2.5%, the S&P 500 is down 2.8% and our combined accounts are down 0.27%.
While we are cleaning up glitches and getting ready for the opening day next week, we had an email outage for the last couple of days due to a GoDaddy outage for some of our employees.
Our S&P Top-10 is leading the pack as of today and we are a little closer to offering a FTSE100 Top-10 for my London friends and relatives. I wonder if they will ever switch to Pounds instead of trading in Pennies and fractions of a Penny?
However, it does remind me of when my brother and I used to get a Sunday Penny after the war to get some Lemon Sherbets.
A lot of selling at the open tomorrow and many of you will remember that our best assessment is that we give up about 15% of profits because we place all orders at the opening of the next day. We calculated a few years ago that if we watched the market all day waiting for signals we could improve returns by approximately 15%. We next decided that by doing that, there are so many intraday false and maybe signals that we are better off not staring at a computer all day.Tuesday Mar 27th 2018
SERVICE STARTS APRIL 2.
Finally, we are ready to go with daily signals to all our Followers with free service for 30 days starting on the first trading day on April 2nd.
We very much appreciate all those who have followed our progress and especially pleased that our Booster Algorithms are working so well across most asset classes and types.
Now with 30 selected stocks and ETFs in 3 groups of Top-10 DOW, Top-10 S&P and Top-10 ETF categories, we believe this service is a winner.
We have also added a new feature we call My Top-10 Booster, which provides my selection of the top 10 Booster Algorithms. This may be just for those seeking exceptional results but most of the assets we follow trade at least 1,000,000 shares each day and represent many different industries.
To make it simple, each Booster shows a current Buy or Sell, and all trades should always be made on the FIRST
day the signal switches from Sell to Buy or Buy to Sell. All trades should then be placed at the next trading day opening price with your Broker.
We started trading all these Algorithms on Monday, March 5 th. and you will see that a few have not yet provided a Buy signal. We are staying with our selection which does not change much but will generally only be changed at month end. If a stock disappears from any selection, it should be sold and replaced with one that is higher up on your preferred list.
For new Followers or Subscribers, the Buy or Sell signals can be taken at any time but the first day of any change is always recommended.
Monday Mar 26th 2018
Ways to use these Algorithms.
My experience in choosing where to invest for the opportunity to increase wealth has spanned almost the entire list of opportunities. I need to first list a few for relevance.
Stocks, Warrants, Options, Bonds, Futures, Funds, Real Estate, Antiques and Stevengraphs make up my short list. Also, I have used Managers, Advisors, Brokers, Banks and Casinos. (I used to count cards).
What do I choose now? I am older, I have time, I am good at Math, I know Computers and I create Algorithms.
Previously, I was an Engineer, but I have made anywhere from a loss to about 8% annually from investing, so I decided to try to make 30% with Algorithms.
Today, after more than 6 years, I can nearly double the annual return of an average exchange traded stock and with choice, I can do better and that is what you must do now.
You must choose from an array of DOW stocks or S&P 500 stocks or a range of the relatively new Exchange Traded Funds.
I have already pre-selected my Top-10 in each group and you can carefully select your own portfolio. The selections you make are from groups that represent 60% or more of US Traded assets.
If you have $1,000 - $2,000 to invest, you might select 2 or 3 Symbols that appeal to you from news stories.
If you have $5,000 - $10,000 to invest,
You might select 3 to 5 Symbols that appeal to you.
If you have $15,000 to $30,000 to invest, you are probably in the range of 5 to 11 Symbols in order to spread your risk.
I was once advised that anything above 11 Symbols puts you into your own unique category.
The final point I must make refers to each preferred Risk/Reward personality. As I said, I used to count cards at Blackjack and made a good return in Casinos both here and overseas, but then some Engineer designed automatic shuffling machines, making me happy that I had a regular career. That puts my type at a high Risk/Reward and my selection has a Top-10 page all to itself.
Most people I know do not fit this group and might select a mixture from the DOW, the S&P 500 and the ETF selection. We provide the signals and you must choose which ones to take.Sunday Mar 25th 2018
BE CAREFUL WHAT YOU WISH FOR!
Thinking that I alone had the Golden Egg, I was of course following the Top-10 of all the Algorithms in all the three groups of DOW, S&P 500 and ETF selections.
My math is ok, but maybe my stock selection needs a little work.
Algorithms are amazing things, as are Computers, but I have received another reminder from the old days called GIGO.
Garbage In – Garbage Out.
It turns out that during the last couple of weeks since we started on March 5th, the Dow 30 Index has lost -4.0% and the S&P 500 Index has lost -3.6%. We probably can assume that any Index of ETF selections would have lost more than that due to leverage.
So how have Roebuck Systems Algorithms performed.
DOW Top-10 went down -2.9%
S&P 500 Top-10 went up 4.3%
ETF Top-10 went down -0.2%
Malcolm Top-10 went up 3.4%
The S&P 500 has performed better than everything else at plus 4.3% in this market while the S&P Index went down -3.6%.
So, be careful what you wish for because my Top-10 list made 3.4% which was worse than the S&P 500 which made 4.3%.
This looks odd until you take a closer look and remember the leverage which is associated with most of the ETF products. They are geared to move lower or higher than the assets they proport to represent.
With that said, GIGO can be at rest until the next scare and I for one am pleased that for now, the average DOW and S&P 500 stocks went down -3.8% while the average DOW, S&P 500 and ETF Top-10 choices went up 1.2%.
In fact, if you look at chart M4, which is currently on a new page, you will see that none of the DOW stocks are represented in my Top-10 selection. Of course, there are only 30 stocks in the DOW Industrials, so no surprise is appropriate.
Also, let me share a little secret. Down below, you will see Chart A1 which for now, shows the current date and the Booster Next Day Trades which are not currently official.Wednesday Mar 21st 2018
YOU MAY HAVE NOTICED . . .
We are progressing quickly and will shortly announce the beginning of our complete program for distributing these DOW, S&P and ETF signals.
All previous Followers and new Sign-Ups will be receiving those details first and I have received many favorable comments so far. I hope you will find the Algorithms and their signals to be helpful and can use them profitably.
As I noted previously, we are following all signals from all 3 groups of assets in our own Account Log. While we will run this as a free program for a while, we will continue to announce changes as they occur in the coming weeks.
One of the changes will be the selection of 30 Stocks or Exchange Traded Products that we follow. These changes will be minimized as much as possible but will change over time as particular assets lose usefulness or as better assets replace them. Larger than normal changes will appear this coming weekend.
Obviously, the DOW 30 Industrials will remain constant until Dow Jones needs to make changes due mainly to acquisitions.
With online trading becoming popular, Brokerage fees are not a major factor and as a rule, we will sell all assets that leave our lists of 30 and wait for signals to buy their replacements. We do not include Brokerage Fees in any of our calculations as there is still a wide range being offered. However, we do list our estimate of annual trades for each asset in the charts if you wish to take this into consideration.Tuesday Mar 20th 2018
NEW BUYS and SELLS TODAY.
This chart shows the new buy and sell signals to be placed at the open for the Wednesday Open tomorrow.
They are highlighted in red.
This is the latest chart with all positions being kept in alphabetical order rather than in date order.
As initially noted, we are following all 30 positions that appear in our three groups of DOW, S&P 500 and Exchange Traded Products but many Followers will have different total results depending on your choice for your own accounts.
The new graph shows actual results to date and the averages from each of the three groups can also be seen.
Note also that we show how many current positions we are holding as well as the average percentage of days that we expect to be in cash. This condition can improve your returns if you choose to invest all or a portion of these cash days into stocks.
Profit on invested cash is currently running at $3,583 with an annual return since March 5 th. 2018 of 197%.Sunday Mar 18th 2018
A FEW POINTS of NOTE.
We currently have three Top-10 asset groups selected from the DOW 30 Industrials, the S&P 500 Index and various Exchange Traded Products.
Generally, we have eliminated low volume assets which could present a problem with multiple traders. Higher volumes tend to produce smaller bid-ask spreads when trading.
Our selections are based on improved potential annual return AFTER APPLYING our Algorithms over a period and therefore may not increase a high performing asset as much as a lower performing asset. However, this is not a general rule as seen from the individual performance charts.
For example, we have cases within the groups that perform well, even though the underlying asset may have made a loss when held for the same period. One of the facts surrounding our Algorithms is that they stay out of almost all assets that enter a declining pattern and often make a profit just from the short periods when the asset turns positive.
For these reasons, it may be helpful to glance at the individual charts for all listed items to see their ability to handle high performing assets whilst also handling low performing assets. In a similar way, they also perform well when a sudden change in direction develops in their own market or in general market reversals.
It is true that our original Algorithms were developed to perform in the areas of volatility. The newest and most exciting aspect is their use within almost any market that we select and due to the interest proving to be almost 50% outside of the US Markets, we plan to extend to foreign markets within the next year or so.
As I was born in Coventry in the UK before ending up here in Chicago, it may well be London and the FTSE 100 calling me home.
As always, if you open a new account at Tradier.com and use the code ROEBUCK200, we will receive nothing, but you will get 60 days or $200 of free trading. We are not associated in any way with Tradier, but we do operate some of our accounts with them.Saturday Mar 17th 2018
HOW WE TRADE THESE ALGORITHMS.
We have been trading and publishing all 30 stocks and ETFs from March 5 th. in our Roebuck Systems Account Log when we first see a BUY signal and selling when we first see a SELL signal.
All trades are placed at the Opening price on the next Market Open Day.
Trades can be placed after receiving our daily evening email signals. Duplicate Phone Text Messages are also available to USA followers and Others who can receive them.
The full program will begin within the next 2 weeks and initially, all Followers will receive all signals. A Charter Member starting date will be announced later when subscription services will be available.
There are many ways to select how you wish to follow the signals depending on the amount of risk/return you choose. We are trading all 30 selections on a continuous basis to demonstrate the ongoing results.
We trade at Tradier.com Brokerage and you may receive 60 days of Free Trades up to $200 if you open an account with Tradier using the code ROEBUCK200. They charge $3.49 per trade.
Beginners could invest $1,000 in just 1 stock from 1 of the Top-10 groups to test the program. For myself, I would probably select 1 or 2 from each group or perhaps choose from the S&P 500 or ETF selections if I chose to increase the risk/reward.
Larger accounts might choose to buy the top 5 from each of the 3 groups. There are many ways to balance your investment style as you go forward and you can always look at our performance Account Log shown above and see at the bottom how each group is performing.
Another interesting number at the bottom of the Account Log tells you how many OPEN positions we have and what average percentage of our account is invested at any time.
You should also note that our log is invested in all 30 assets whereas higher results may be achieved if selections are made from the top of the lists.Friday Mar 16th 2018
END of WEEK UPDATE.
We have updated the Algorithms for the end-of-week positions and signals. These are as of the close on Friday, but it should be noted that some changes may occur over the weekend.
You can see that all Algorithms are based on the Top-10 selections of assets in each of the three categories that we currently offer. That is our selection of the Top-10 DOW stocks, the Top-10 S&P500 stocks and finally the Top-10 ETF and ETN products.
Our current selections may change slightly over the weekend while we input the latest information available to the Algorithms.
It is highly recommended that a last check of this BLOG and charts be made before any signals are assumed as final for the next market opening.
There is still work to be done on the website and you will still see changes before the end of the month.
Thursday Mar 15th 2018
Early Account Results.
We started trading the 30 Algorithms on March 5th and these are our current results. As usual, they are based on trading at the opening price following the signal. We currently have 21 positions.Wednesday Mar 14th 2018
SAMPLE of ALL 3 BOOSTERS..
Having now completed samples of all three DOW, S&P and ETF Booster Algorithms, here is a first look at the results.
Obviously, we are extremely pleased with the ability of these Algorithms to sort out their best results from a range of investment assets.
We started with the DOW 30 Industrials as a trial of a broad but well-defined group of stocks that are widely held in many portfolios and they offer the opportunity to fine tune and boost the annual returns that can be achieved by every investor.
Having seen those results, the natural move was to a much broader range as defined by the S&P 500 Index and we also select a Top-10 group to offer daily signals.
Finally, today you can see the last group of Exchange Traded ETF and ETN products that have been applied to our range of Algorithms with even greater potential.
This puts us much closer to offering daily support in these three ranges of assets and we are progressing towards a better-defined website as well as more description on how these can be traded.Sunday Mar 11th 2018
Current DOW and S&P500 TOP-10s.
Here’s a look at the current TOP-10 candidates and the increase in annual profitability after using our Booster Algorithms.
We started traded these results last week and as always, we will soon publish the results for all to see ahead of any trades.Saturday Mar 10th 2018
DOW and S&P500 BOOSTERS.
Making great progress in aligning our Booster Algorithms to the DOW and S&P Favorites.
The idea behind these charts is to select the DOW 30 Industrials and also 30 of the best performing S&P500 stocks and apply our unique Booster Algorithms to greatly improve profit performance.
We began trading the Top-10 of each group with very positive results. The concept has not changed much from previous Algorithms other than needed modifications but we have tweeked them to resist negative turns slightly.
We will soon demonstrate a sampling of the charts with very accute ability to accept positive moves but resist negative moves. I am posting today a group of charts for the DOW and for the S&P500 selections.
Early days but exciting progress.Tuesday Feb 27th 2018
TEST Booster UPDATE.
More testing and some very interesting results.
We tested some more high volume ETFs and ETNs across the board to see what kind of results we would obtain. Some of these were also suggested by followers.
What keeps surprising me is the fact that we turn negatives into positives - how great is that?
We also tested ZIV in our forthcoming Volatility group as we would like to get into VIX derivatives as there are quite a few to choose from.
We cannot do a daily run on any particular stocks but if you have suggestions for singles or industry groups while we are in the testing stage, they would be welcome. When we do get started again we will offer daily updates with appropriate signals.Monday Feb 26th 2018
DOW Booster UPDATE.
Here is a follow up of a typical end of day Dow Chart.
Still working on systems for daily updates but will post charts and data as we progress. I don’t advise using these signals currently as they will not be available every day but it does show how useful it will be within a few weeks.
You can see that INTC is shown as a buy for tomorrow.Sunday Feb 25th 2018
LOOK at the - DOW BOOSTER.
Here is the first look at the procedure for our Dow Booster program.
Monday morning gave you the new signal to buy Coca Cola Co. (KO), at the opening price if it was one of your preferred portfolio stocks.
It certainly benefits from applying our Algorithms. In the past 12 months it benefited from a 5.7% annual yield and moved up to a 15.8% yield. Total days owned was 225 out of 252 tradable days in the past year.
Would you choose to buy it tomorrow?
I cannot make that decision for you, but I have some mathematical facts that our proven Algorithms have consistently produced over 6 years and publicly demonstrated for more than 2 years.
Just look at Chart E, at the column marked - Action at Next Open. You will see all 30 Dow Industrial Index stocks, with their current Last Price and the annual gain before using our Algorithms.
Next, you will see the algorithm signals uniquely generated for each stock. They indicate either Own/Buy, In Cash, New Buy or New Sell. Following that column, you can see how many Buys and Sells occurred during the past 12 months. If it is still owned or is a New Buy, there will be one less Sell. If it is In Cash, our Algorithm is indicating no current ownership of that stock and the Cash may be reinvested in other Dow stocks.
There are usually 252 Trading Days each year and we have subtracted 3 additional days to allow for buying a different Dow stock and assumed that you would then be invested at the average annual return rate which is indicated at the bottom of the column headed – Gain After Algorithm. We assume this rate for all - In Cash - days for all 30 stocks after eliminating the 3 days for each of them.
To complete the explanation of this current Chart E, if you divide the average - Gain After Algorithm - by the average - Gain Before Algorithm, you will get 1.94 which represents the 94% Accumulated Algorithm Gains.
Finally, if you add the average – Gain After Algorithm - to the – In Cash Days Invested, and divide the total by – Gain Before Algorithm, you will get 2.60 which represents the 160% Total Accumulated Gains as a potential minimum annual return.
Why do I say – potential minimum?
For example, my personal plan would be to invest in less than the entire 30 Dow stocks and choose a changing portfolio of the best 5, 7 or 9 stocks chosen from the highest - Gain After Algorithm column. When our Algorithms kick one of them out of my portfolio, I would simply replace it with the next highest stock that moves into my portfolio.
I might complicate the selection by assigning a different percentage of ownership to each stock in my portfolio based on the performance indicated toward the top of our chart.
If I worked at Cisco or already owned some Apple stock, that might also affect my choices, but I would still Buy and Sell from our signals to improve the returns.
Finally, I probably would not Buy Coca Cola based on my own Algorithms. From the past, it made 26 trades in 225 days of the past 12 months and still only produced 15.8% of profit.Thursday Feb 22nd 2018
LATEST CHART for DOW INVESTMENTS..
This is an example of the work on the Dow 30 Industrials although the signals were given on different days this week and are not current.
We are using Cash to reinvest into an average stock minus the two days of cash T+2 banking rule for available funds.
As we continue to have progress I will post items of interest.
The point of posting this chart is to show that none of the 8 losing Dow stocks show a loss after using our new algorithms and the average gain is 112% more than your buy and hold strategy.
If you reinvest available cash in an average Dow stock at 33.4% the annual return increases to 181% more than a buy and hold strategy.Sunday Feb 18th 2018
NOTES ON TRADING THE DOW.
We have redirected our energy into finding an alternative to trading XIV and Volatility and we are finding some very good and less risky alternatives.
The main change has been recognizing that our Algorithms work on many stocks, indices and ETFs. Certainly, we must modify our Algorithms each time, but finding alternative investments has become more important to our efforts.
We created mathematical algorithms from years of development, but simply finding alternative investments is not so difficult and is less time consuming.
I have spent time this week looking for better computers but also looking at aspects of trading the general markets for leverage and less risk. You have seen our results for individually trading the 30 Dow Jones Industrial stocks.
Now, I want to show you three available alternatives that can each run through our system with surprising results. The new chart E1 contains these results and we offer the following explanations and comments.
The top part of the chart summarizes the 30 individual stocks from the original chart E, showing the combined average results from trading all of them on an individual basis from a few days earlier 12-month period. Basically, traded with equal money on each, they produced an 18% profit and our 30 individual Algorithms produced a 35% profit.
That works out to 193% gain or a year-end profit of 93% after 219 trades with an average invested period of 162 days or 64% of the 251 trading day year.
The bottom part of the new chart shows individual results for Exchange Traded Products that each profess to represent the Dow Jones 30 Industrials.
The first DIA is a long time favorite and returned 22% versus the 18% of the original accumulated individual stocks. That seems a little odd but many of the construction and trading techniques could each partially explain it and that is not my interest at present.
The second DDM is a 2x leveraged ETF by Proshares set up to do twice the performance of the Dow Industrials. It did more than double with the past 12 months reporting a 48% return. Again, internals and trading may well explain those differences.
The third UDOW is a 3x leveraged ETF by Proshares set up to produce three times the performance of the Dow. It also did more than triple reporting a 78% return. Once again, we will not go into the reasons why this might be.
This chart E1 is to show what happened when we ran all 30 stocks as well as the 3 individual ETF’s through our modified Algorithms. Obviously, the straight DIA at a 22% did not benefit as much from our 24% result. One reason that I can see is the difference in the quantity and value of signals when fine tuning is reduced to 1 signal per day versus 30 individual signals.
Our results improved as we went up in leverage and unfortunately, this also means up in RISK. However, if we apply our Algorithms to each of the 30 Dow stocks individually, we get our best percentage improvement at 93%. There must be a lesson somewhere.
My Mother was smart, and she said more work makes Johnny into a much smarter boy. I hope she knew nothing about the S&P500 or I am in for a lot more work.Saturday Feb 17th 2018
UPDATED DOW RESULTS.
Chart E has been updated to use Friday close prices for all 30 stocks and a small error in the last 6 stocks corrected for trade quantities and days invested.Friday Feb 16th 2018
COMPLETE DOW RESULTS.
Finally completed results for the Dow Jones Industrial stocks and much of the information remains as previously reported. You will see a chart on the Blog now showing all Dow 30 stocks. So, what can we finally report?
First, if we were invested in the entire set of Algorithms, we would currently own 19 of the 30 and we would improve the past year of results by 93%.
Finally, we would have made 219 trades and be invested for an average of 160.4 days each or 64% of the time. Average cash would be 36% of invested capital.
One clever interpretation of this would be that if the cash were put to work in the average return of these Algorithms, then the return would be much higher.
We would ideally calculate that by the following formula: -
(36% divided by 64%) multiplied by 93%, giving us an additional 52% profit for the year. The total return for the year would then be 145% profit in THEORY.
Information is coming faster right now and there will be an additional post to the Blog on Monday. Thanks.Thursday Feb 15th 2018
REALLY GOOD RESULTS SO FAR.
Hope to increase the information that I can report as the results are now becoming more evident as we proceed.
You will see a chart on the Blog today that shows our plain vanilla Algorithms working on the first 16 stocks belonging to the Dow 30 Industrials. They are in alphabetic order with no specific choice.
The exciting part of this to me, are the substantial results across the board, which leads me to be confident that we have more universal appeal. We can in the future put various types or combinations together.
Note that if you invested in these first 16 Dow stocks exactly 1 year ago, with equal amounts of money, you would now be up by 17.6% after 16 Buys.
However, if you had run the stocks through our New Algorithms during the exact same period, you would currently own 10 of them and you would have more than doubled your profit. This after just 100 total trades.
Here is the good stuff!
Not only that, but your money would be invested much more efficiently because you would have it invested for less of the time, making the cash portion available for increased investments, either in our Algorithms or some other choice.
Simply put, if we say that stocks go up 60% of the time and down the other 40% of the time, and you can be out when they are going down and in when they are going up, you achieve much better results.
A further look at the first straight purchase of all 16 stocks means that you would have lost money on 3 of them with the worst being General Electric at minus -51.1% and the best being Boeing at a positive 102%.
Our Algorithms eliminated all 3 losses and changed General Electric to almost 4% profit with the best still being Boeing at 114% profit.
Obviously, there are a multitude of choices just surrounding the Dow, but we are looking at other possibilities as well as single stocks, ETNs and ETFs. There are just as many choices when considering types of World Markets and types of Industries, either individually or as melded groups.
Please stay tuned as I fully intend to finish all the Dow 30 Industrials and make some choices available as soon as possible. We are committed to this project, especially now that we see so many alternatives in an amazing array before us. Thanks again for your interest.Saturday Feb 10th 2018
THERE IS ALWAYS A BETTER WAY.
With seven years of focusing on the best way to improve my own investments, algorithms took second place to finding the VIX Volatility Index and XIV concept.
I must tell you that one week of failing results and having to think about the Credit Suisse deal, finally pointed me to successfully applying the Algorithms to tests elsewhere. And it worked!
In 1969, I used a Consultant to run a seminar on Functional Analysis, when I first heard the phrase – There is always a better way. I recognized it as part of my DNA and immediately adopted it.
Unfortunately, I do not do magic tricks, but I do have this DNA that does not quit, and I also still have over 6 years of Mathematical Algorithms and research.
I did some preliminary testing on a broad set of Exchange Traded Products and those results are shown in the small chart below.
The Top 10 includes Biotech, Semiconductors, China Stocks, Dow Stocks, Nasdaq Stocks, Crude Oil, Natural Gas, Silver, Oil Services and the S&P500 Stocks.
The Chart shows their Market returns for the past 12 months and finally, the Annual Return after processing them through the Algorithms.
My current thinking is an index or mixture that solves the issue of relying on a single issue such as XIV, which worked well for about 3 years before the recall. This is very early and will take more time to develop.
I will keep the Website and Blog going with the intention that negative and singular goals will be replaced by a balanced approach that will work, no matter the direction of the Markets or Economy.
Worth noting from the chart is that Gold and Silver and maybe Energy often become hedges against the Dow and S&P500. However, more importantly, Industries that lost money over the previous year were turned profitable after the Algorithms were applied.
I will send out occasional emails as significant changes occur and want to thank you for your interest in these Algorithms.
Tuesday Feb 6th 2018
A HUGE DISAPPOINTMENT.
This has been a huge disappointment to you and to all of us and for it to happen in Extended Hours Trading is no solace.
XIV opened today at 10.49 and in three steps went to 5.50 and traded up to 8.69 and down to 7.35 at the close.
Credit Suisse was quick to issue an Event Acceleration per their Prospectus and we appear to be subject to XIV going below 20% of the Prior Day Closing Value.
Here is the Credit Suisse announcement again --> Credit Suisse Announcement
My apologies cannot change this bleak situation. Positions may be liquidated before the cash payment per ETN which appears to be after Feb 20th, 2018.Tuesday Feb 6th 2018
ALERT - Roebuck Systems Update
We have received several questions asking how yesterday's events have impacted XIV trading. We want to share an update on how we understand what is happening.
Credit Suisse announced the following this morning: --> Credit Suisse Announcement
It appears that no new shares will be issued and trading will end on Feb 20th. Trading in XIV has not currently opened. We will continue to update you with any new information regarding XIV and do our best to provide clarity on anything else that arises.
Malcolm and the Roebuck Systems team.Monday Feb 5th 2018
I am advising all followers not to buy any XIV until we can ascertain whether or not Credit Suisse or VelocityShares intends invoking their 20% value rule. During Extended Hours Trading tonight, XIV went as low as $10.00 per ETN which may or may not affect their 20% rule. We will try to find an answer to this and publish our findings as soon as we can.