Sunday, February 22, 2015

A Few Changes...02.22.15

Going forward there will be two changes in the daily updates:
1.  We will use the expanded Lazy Man model (M3 LM) with SSO and SDS (SPY ultras long and short).  The reason for this is simple. Our goal is to maximize gains and minimize risk.  Comparing the returns for the 3 input and 5 input variations of LM we see that our maximum exposure is very similar between the models but the % returns are considerably different. As an alternative to trading SSO and SDS when they are raked #1 simply trade the #2 ranked position...the net returns will be almost exactly half of those using the ultras.  Another advantage of using the ultras is that when they cease to be #1 ranked, either long or short, its generally a pretty good early warning sign that current trend momentum is waning and/or about to reverse.
2.  Per our survey results only M3+ results will be posted although I'll continue to track M3 and post any divergence in the M3+ and M3 signals.
The jury is still out on the value of the 6:50 AM signal post.  It showed little value this week as all the morning dips were reconciled to the upside by the close.  We'll give it another week or so before deciding to hold or fold these posts.

Here's the classic LM with 3 inputs>
And the version that includes SSO and SDS>