Cycle Trading

[Duma]

I thought about what No-Q is doing concerning sector trading. He posted that he was trading the 3x efts instead of the actual XL? etfs with equal dollar amounts. Don't know how much of his capital he is committing, but if it is 100%, his leverage I would think would be somewhere above 250%. That would be super aggressive in my book, but who says aggressive would not be okay.

So I thought more about the equal weighting idea and wanted to do a analysis. Here is my comparison.

RSP - etf for equal weighing of every stock in the S&P500

EQL - etf for equal weighting of each of the sectors of the S&P500. I believe they are using the XL etfs, which means stocks are not equally weighted within the sectors.

ES TL - This is what I think the performance would be if I was trend line trading each sector, but with each sector having equal weight. Would be an upgrade to EQL where each sector may or may not be long depending on market conditions.

WS TL - This is how I am trading. Trend line trading each sector but maintaining weighting for each sector per it's weighting according to SPDR.

 
          2021    2022    2023 
 SPY    28.7%   -18.2%    7.8% 
 RSP    29.4%   -11.6%    8.4% 
 EQL    29.3%   -10.7%    6.6% 
 ES TL  31.3%    20.1%    4.7% 
 WS TL  30.9%    15.0%    5.7%

2021 was a very year so all of the strategies preformed about the same as expected. A rising market covers many sins or a rising tide floats all boats

2022 shows the powerful effect of not being invested in sectors that are preforming badly. Equal weighting of the sectors won out.

2023 is still young. Too early to say which TL trading strategy is the best.

I think I will just keep doing what I am doing, but check on the ES (equal sector) results as the year progresses. If it out preforms this year, then it needs serious consideration.