Wall Street tumbles as consumers wilt – Operation Sow’s Ear June 29, 2010
Posted by Marlowe Cassetti in PSQ.trackback
Stocks extended losses on Tuesday and the S&P 500 index (^SPX – News) broke a key technical resistance as it fell below 1,040.78, its previous low point for 2010.
The S&P 500 index h
eld that level twice this year, and many market participants saw it as a near-term bottom.
The benchmark hit a near 8-month intraday low and is also on track to set a new 2010 closing low, below 1,050.47.
The Dow Jones industrial average (DJI:^DJI – News) dropped 276.98 points, or 2.74 percent, to 9,861.54. The S&P 500 fell 36.05 points, or 3.35 percent, to 1,038.52. The Nasdaq Composite Index (Nasdaq:^IXIC – News) slid 90.47 points, or 4.07 percent, to 2,130.18. (market commentary & photo courtesy of Reuters)
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A funny think happened when I ran RSI yesterday after the close. A module of questionable validity issued a buy on PSQ – ProShares Short QQQ. The past few days on the chart tells the tale.
If you had bought on the opening you would have a nice profit on this down day. However, I didn’t recommend this pick because of the mediocre performance of this module. It has an average trade expectancy of $321/trade for each $1000 risked. Compare this with expectancies of $975 to $1400 for RSI’s better modules. This module makes trades based on relative performance to a benchmark. Since the benchmark is the S&P500, which has been weak lately, it is reasonable that the module picked this short fund. But this gets me thinking that maybe I should take a closer look at this model’s code and maybe try to refine it to achieve better results. Let’s call it OPERATION SOW’S EAR. We shall see if we can transmute this sow’s ear into a silk purse! And, as always, I will keep you appraised of my progress on these matters.
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RSI had no picks today … catch you later.
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