Weekend Update – A Simpler Approach

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As I began reading up on the events of the past week in order to prepare for this weekend’s Weekend Update post yesterday it suddenly occurred to me that I might be wasting my time. All I was doing was regurgitating the same information that could be found by reading Investor’s Business Daily or any of the very intelligent people who were already doing a much better job describing their approach to that style of investing (Mike & Joe).

In order to get some confirmation on my new opinion, I reached out to a new friend. The conversation went something like this:

 

 

I guess that answers that. Upon deeper reflection, I realized that I have really just been going through the motions with my Weekend Update lately and there are two good reasons for that.

First, I am ridiculously busy. I work full time running a restaurant and banquet hall and then work part time as a freelance writer which I hope to eventually make my income stream that funds my trading account. Because of my hectic schedule, I have been sitting down at around 10 PM every Saturday night and trying to bang out a Weekend Update before falling asleep. The results have been less than stellar.

Second, I’m just not that interested in CANSLIM investing anymore. It’s not that I think there is anything wrong with the strategy though. I just feel like my general lack of self-confidence puts me a tremendous disadvantage when it comes to making discretionary trading decisions. On the other hand, I am finally getting some traction in learning how to build a trend following system like the ones I read about in Covel’s book almost ten years ago.

The way that Woodshedder was able to backtest my SPY 10/100 Trend Following System and give me legit numbers on how I could expect it to perform moving forward has had my head spinning for a week now. I can’t not move forward learning more about these automated trading systems.

So with all of that said, what should I do now? Well, since @SystemsTrader95 is kind enough to tweet his long and short positions at the end of each week, I could probably learn something from looking at those charts. For now I’ll just look at his Core Trend Following Program.

Long Positions:

S&P 500 SPDRs – (SPY)

Since the 50 day line dipped below the 100 day line at the beginning of the year, this chart has been cruising higher. It has also held the 50 day line despite recent market action.

 

spy042113

 

iShares Barclays 20+ Year Treasury Bond Fund – (TLT)

Despite the 50 and 100 day lines crashing through the 200 day line earlier this year, this chart looks to be coming back. Price is currently trading above all three lines and if I were to add the 10 day line to this chart you would see that it shot right up through the other averages.

 

Financials Select Sector SPDR – (XLF)

Here we have another chart holding up at the 50 day line.

 

Japan iShares – (EWJ)

This chart has looked very strong ever since the 50 and 100 day lines crossed the 200 day line at the beginning of the year.

 

Guggenheim China Real Estate ETF – (TAO)

This is the chart I understand the least. I’m not sure if it is on the long list because it has logged significant gains or because of the recent jump through the 50 day line back to the 100 day line. Regardless, it is still trading well above the 200 day line, as are both the 50 day and 100 day lines.

 

Currency Shares Euro Trust (FXE)

This is another one that looks kind of choppy, trading at the 50 day line and under the 100 day line. Again, it is still well about the 200 day line.

 

 

 

Short Positions:

Russell 2000 iShares – (IWM)

I’m guessing that this is on the short list because of breaking the 50 day line.

 

iShares Silver Trust – (SLV)

Pretty clear why this trend is down.

 

 

SPDR Gold Trust Shares – (GLD)

Again, this one is obviously a down trend.

 

 

iShares MSCI Emerging Markets – (EEM)

Trading below the 200 day line. 50 day recently crossed below the 100 day.

 

 

EMU Index iShares – (EZU)

Trading below the 50 and 100 day lines. 50 day line looks to be crossing the 100 day line right now.

 

 

Powershares DB Multi-Sector Commodity Trust Agriculture Fund – (DBA)

Trading below all three lines in order. Clear down trend.

 

 

United States Oil Fund – (USO)

Look like this chart was pretty choppy up until about two weeks ago. Clearly trading well below all three averages now.