As we wrote earlier this week, if you are taking a purist approach to the Market Direction Model, there has up to today been no neutralization of the sell signal of August 11, hence there was no reason to sell core positions in any inverse ETF position taken August 11. This remained true, until today, where we are now seeing sufficient volume and price movement on the NASDAQ Composite and the other major market indexes to call a follow-through day, which sends us to a buy signal. This is our suggested strategy:
According to your risk level, purchase : the 1x QQQQ or SPY ETFs, the 2x QLD or SSO ETFs. For those who wish to trade more aggressively the 3x ETFs in the Semiconductor Index (SOXL), the Russell 2000 (TNA), the Russell 1000 Technology (TYH), the three-times leveraged NASDAQ 100 Index (TQQQ), and the three-times leveraged S&P 500 Index (UPRO) could be bought here. Position sizes are at the discretion of each subscriber, depending on risk levels, but a 25% position in a 1x ETF would be a sufficient start here for a very conservative approach.
The idea behind the 3x ETFs is that if the market is bouncing on a strong 4th-day follow-through, then these sectors and ETFs are likely to bounce hard as well. Remember that 3x ETFs, like 2x ETFs, entail more risk.
Currently we have taken a position in the SOXL.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
