Is the future of treasuries at all certain? Not according to Monday's Ponzo forecast and we can quickly dredge up bond gurus managing billions with diametrically opposed views about TLT.
So as retail traders we have to accept that with so much international money vested in treasuries (China, Russia, Saudi Arabia. etc) its virtually impossible for the little guy to front run the treasury markets and we have to behave more like a speed boat tacking an aircraft carrier to maneuver quickly and avoid the drenching wake.
Yesterday we looked at how M1 looks at TLT data with a mean reversion bias to gain an edge and today we look at how the MVP ( Mosaic volatility/price) model tackles the same data using both a mean reversion and short term mean reversion perspective.
Once again its important to stress our prime directive...risk management as reflected in minimized drawdowns. We quickly see that MVP doesn't spend much time vested in the trades but when the trigger does fire the results are quite reliable as shown in the comparisons of drawdowns and RSQ linearity.
While this approach doesn't appeal to everyone it does provide a steady capital appreciation with considerably less risk exposure than a buy and hope strategy.
Going forward ...in the next week or so I'm going to create several combo software packages focused on SPY, TLT, QQQ and perhaps XLE. Each one will include the M1 and MVP modules tuned appropriately to that ETF although users can easily change inputs, stop settings and volatility triggers. All programs include real time data that can generate pre-close signals.
Pricing is projected at $200 each or $350 for the bundle with free updates as they become available..
I'm only going to offer the packages for 30 days or so.
In the Fall I will have eye surgery that will severely limit my screen time for a month or so and I want to get user questions asked and answered before that hiatus.
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