exp system

[exp]

i have been re-evaluating my system for the past few days...
the objective was to adapt it so that i could also use it effectively to trade mutual funds in my long-only retirement accounts (stocks and bonds only...no short funds)...

the result is that i made almost no system modifications as far as profunds trading is concerned...with one exception...this exception is important as it opens the door to holding ndx funds for longer periods of time...it is based on a well-recognized fact that spx plays the central role and ndx only plays a
supporting role...

in short, spx determines the trend which carries ndx with it (most of the time)...granted ndx is about 2.2 times as volatile as spx on daily percentage change basis so ndx moves are normally about 2-2.5 times as large as spx moves in rallies...
yet, spx essentially is a "smoothed out" version on ndx/compq in that it moves up more steadily and when it stalls the rally is likely over/nearly over...

the conclusion: when attempting to hold a long ndx position for the duration of the rally, one should monitor spx to see if it still trending up...the reverse of the above remarks applies to shorting ndx on prolonged drops...if shorting is not feasible, bonds are an excellent substitute imo...