Someone in our latest webinar had the audacity to claim that the simple stock system probably couldn’t be used on a stock like Financial Bear 3x (NYSE: FAZ). I guess he didn’t realize that I had already featured FAZ in December, and its 2x leverage cousin SKF has been featured several times. Anyway, I told him I’d post some FAZ for him today.
So, here’s the last two days of FAZ. First, the 12th:
So, we have a long right at the open. Note end-of-trend comes up right away to tell you to at least lighten your exposure. Then, depending on your sensibilities, you’d either hang on long through the next two long signals, or get out b/e the rest. If you got out, then you’d get back in a couple more times for one scratch and one loss. The loss, to me, is taken at the red bar.
Next up, at around 12:57, we get long again for a fantastic run. End-of-trend tells you where to take partial profits along the way… and if you still have any shares left at the red bar, you’d exit the rest of the way.
Then, at the end of the day, you have a short signal that is a clear winner. End of trend tells you where to take profits.
Beautiful!
Now for today, February 13th:
Today was pretty flat ahead of the 3-day weekend. There’s a short trade that you’d reverse into a long trade around 10:52. As always, on the long trade I’d recommend taking most or all of your profit at Alla’s Average. See how well that thing acts as resistance? Incredible! But, at this point you’d still be slightly down for the day.
The short trade at 13:40ish is right on top of Alla’s average, and Alla’s Average is kinda flat. I wouldn’t recommend taking this trade. But if you did, then you’d have a nice winner. Note that end-of-trend tells you when to take profits.
Finally, there’s a long trade at the end of the day that you’d close out at EOD for a nice profit.
Summary
The Simple Stock System kicks ass. End of story! Both days we had 1 loss and several wins. See the other posts with the simple-stock-system tag for example after example.
Thats unbelievable. The Audacity? Richard easy now, you shouldn’t be so sensitive. The question was would the system work as well on a ETF like Faz because of its volotility as it can go up or down a point or two in a matter of seconds compared to other stocks. Please check your sensitivity at the door before you think someone is attacking you or your indicators before any question is asked.
Oh, I was just spicing up the post. Don’t take it personally! People respond to bombastic language and bold claims. It’s just a blogging fact of life.
Don’t be so full of yourself, we are just blogging along.
LOL ok thanks for your input. If you ever want to see another stock I’ll try to remember not to put my tongue anywhere near my cheek. It’s supposed to be all in fun, you know…
Richard, I know this post is a little old but I’m just now seeing it. I have a couple questions about your analysis. On the first chart, the second signal to go long (12:57) occurs right on Allah’s average (AA). I thought you said in a recent school avoid trades where the signal occurs right on AA. Correct? Also, I think I’ve heard Bill say to, in general, go long when buy signal occurs above AA and go short when a sell signal occurs below AA. For example, the final signal of the day is a short below Allah’s average (15:3.4). So, you’d take that trade. But on the second chart, you’d only take two of the four signals (10:06 and the end of day signal if you are brave). In other words, one would skip most of the signals shown of these two charts. Correct?
son of Irv,
To me, it’s not a matter of being “on” it so much, but whether we have established the line as support yet. If you look closely, you can see that price pushes through alla’s avg, then comes down to tag it, then the signal bar is pushing up away from it again. So, that’s not bad from my viewpoint. The ones I hate are the first push through alla’s average, before the retrace and run.
For these stock posts, I want to be as mechanical as possible. So, I’ll talk through all of the signals, and only try to comment on how strong or weak the signals are as part of my analysis. Whereas on futures I might be eager to skip trades that run counter to Alla’s average, in stocks you have a lot more flexibility with position sizing… so a small trader could still take a chance on the signals, with like 1/3rd size or something… you might find that’s a good approach since a lot of the “bad” signals still give a chance for profit, even if the percentages aren’t quite as good. Then again, maybe you just watch a big enough basket of stocks so that you can cherry-pick the signals and still stay busy…. lots of ways to skin this cat, you know?