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Smart Money: Bull or Bear?

Dan May 9, 2022
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Corona Del Mar, CA

 

Howdy Friend!

 

Inquiring minds may want to know...Is the Smart Money bullish or bearish on the stock market?

 

Let's take a look at its sole input: "Non-reportable" column of the Commitment of Traders ES E-mini S&P 500 futures contract.

These are traders who hold less than 10 ES futures contracts.

 

They are so wrong that I was able to trade exactly against them since 2006.

 

Typically what you'd see before a crash is a big upward spike in the data...which we're clearly not seeing right now.

 

Although the strategy has been right the vast majority of the time, it's currently in a 21% drawdown while the S&P 500 is in a 13% drawdown.

 

These things have a way of reverting to the mean, which make me wonder if we're going to get a massive counter-trend rally.

 

Perhaps this is a more advanced topic, but I was discussing building a strategy of strategies with our Dirty Dozen members.

 

They've discovered over 20 ETF pairs to trade long/short...so a strategy of strategies would help them select, let's say, the Top 5 ETF pairs.


That's pretty manageable right?

What they're discovering is that the ranking engine will often pick the WORST performing ETF Pair!

 

After a bit of a rough patch, a great strategy will go on a tear and start outperforming its peers.

 

I suppose an analogy is the weather. After an extremely cold winter, you'll very often get an extremely hot summer. Or after some terrible down days in the stock market, you'll see the biggest up days.

 

Check out this graph:

One of the main benefits of trading multiple trading models long/short is that you're no longer a cheerleader for your "side."

 You're no longer bullish or bearish on the stock market.

 

Imagine having a long position in SSO (2x S&P 500) while simultaneously having a long position in SQQQ (the -3x NASDAQ 100). All of a sudden the news no longer matters does it?

 

That latest research about rising interest rates crushing the bond market isn't all that important when you're long/short bonds and gold. The calculus completely changes when you're in a variety of asset classes as Ray Dalio discovered.

 

His "All Weather" strategy holds stocks, bonds, gold, and commodities in specific percentages. 

He sells into strength and buys weakness in all four of these asset classes.

 

It's a fairly passive fund, so it only makes about 8% per year.  Not exactly the Holy Grail of strategies (but it's a start).

 

The holy grail of trading strategies was never about one strategy...it was always trading several of them together that gives the smoothest, most consistent results.

 

By the way, if you'd like to read about a wide variety of different trading strategies, here's where to start:

 

https://portfolioboss.com/free-reports/

Trade smart,


Dan "Prince of Proof" Murphy

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Step 5: Additional Resources

The Relaxed Investor (The simple strategy proven to work since 1926. Downloaded by over 200,000 readers)

The Ghost of Bernie Madoff is Not Yet Dead (Is your broker on the naughty list? Many traders have no idea they're being sold out)

The Ultimate Crash Detector (The strange weekly report that helps predict crashes. LIVE trading signals since 2006)

Portfolio Boss User Guide (Our flagship strategy building platform User Guide. See what it can do to help you on you quest for F U money)

Trading With Other People's Money - Coming Soon!

Bit-coin for Busy People (How to get started with Bit-coin in under an hour without the complicated new exchanges, high fees, and complicated wallets)

Disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.

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© 2024 Copyright All Rights Reserved. Portfolio Boss, Inc. | Powered By: Monster Development

EARNINGS DISCLAIMER: I like to provide full transparency and not blow smoke up your behind, so listen up.100% Club members in general are seeing between 91%-100% winning months in back tests just using the Instant Start templates I created for them. These results are out-of-sample (unseen in the optimization phase), so I put a lot of weight into that fact.

I don’t yet have a statistic for the average member as far as gains are concerned. There are a lot of variables because this is not a cookie-cutter program. I do have dozens of brokerage statements on file, and the majority are looking positive.

There were a couple outliers that weren’t good because they went off track. I believe I convinced them of where they went wrong and they are back on track (too much leverage, and some over-fitting to the past). That’s my job :)

There are other factors in play as well such as: Are you actually making the trades? Account size. Is your broker any good or are they fleecing you? Are you using all the leverage available to you, or are you dialing it back like I recommend?

Simply put, I believe the reason we’re seeing the highest preliminary success rate of any program EVER is because:

a) you’re selecting from 100+ supercomputer-built strategies, and the odds of them all failing at once are extremely low.

b) the strategies take advantage of highly unusual edges that very few if any know about.

c) Our Meta ML technology is completely unique in the trading world. Very few understand that all strategies have cycles, and that there are opportune times to trade them. This allows you to treat trading more like a business rather than a hobby.

d) The daily instructions are brain-dead simple to follow, and can be accomplished in just a few minutes.

Government required disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.

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