STRATEGIES

Most of the time the above-mentioned indices and ETF's will move approximately in the same direction. For example, when the Nasdaq 100 goes up, the S&P 500 will go up as well. The difference is that (usually) the S&P won't go up or down (in percentage points) as much as the Nasdaq or the Russell 2000, because the Nasdaq and the Russell 2000 are more reflective of the mid to small cap universe, and small cap stocks tend to be more volatile on there way up and down. Therefore, if you are looking to invest in a conservative way you should buy and sell only the “SPY”, however, if you don't mind more volatility you can use the other ETF's mentioned. Note: The “SMH” has greater volatility than the other ETF's, therefore, with a working strategy, over time, trading it should result in better performance than by trading a less volatile ETF. (The greater the risk, the greater the potential rewards).

You may also choose to diversify between the indices and buy two or more ETF's simultaneously. The benefit of this strategy is that your performance will be more balanced over the long run. (For example, from 1995 to 2000 the Nasdaq did better than the Russell 2000, so during this period you would have made more money, in buying the QQQQ rather than the IWM; However from 2000 to 2005, the Russell 2000 did better).
 

MUTUAL FUNDS

You may also participate in our signals by investing in Index Mutual Funds that will track most of the applicable indices. And since most diversified Mutual Funds will mirror these prospective markets, you can use our signals for most diversified Mutual Funds (For example, the performance of a diversified large-cap fund, usually corresponds to the performance of the S&P 500 and the “SPY”, the performance of a small-cap fund usually corresponds with that of the Russell 2000 and “IWM”, and a technology fund with the Nasdaq and “QQQQ”).
 

LEVERAGE

If you have a high tolerance for risk, you may consider using a "leverage" strategy, which will approximately double the amount of your potential gains and losses. There are many ways to execute this strategy:

(A) If the “QQQQ” is your investment vehicle of choice, the simple way to apply "leverage" is by buying the "QLD" when we are Long, and by buying the "QID" when we are Short. For the “SPY", buy the "SSO” when we are Long, and the "SH" when we are Short. For the “MDY”, buy the "MVV" when we are Long, and the "MYY" when we are Short. Those ETF's are structured to capture double the amount of the applicable ETF’s and indexes. (If you are really aggressive, you can buy these ETF's on margin; in this way, your movement will be four times as much as the underlying ETF. For example, for every 1% move of the Q's, your investment should move 4%.)
(B) Invest in index mutual funds that use a "leverage" strategy; the performance will be approximately the same as the previous option. Please visit www.Rydexfunds.com or www.Profunds.com for more information.
(C) Do it the old-fashioned way, by buying (when Long) or selling (when Short) double the amount of money you invested (“Margin”). With this strategy, your investment will move twice as much as the movement of the applicable ETF. (Note: There will be margin interest charges.)

INTERNATIONAL MARKETS

Historically, there is a correlation between the performance of many of the world's stock markets to that of the U.S. stock market. One may move up or down more then the other, but rarely will move in opposite direction for a substantial period of time. Therefore you can utilize our signals to trade international markets as well.

The following are a few examples: (Long and Short. September 22, 2004 to August 1, 2006).