(Addendum) RSI keeps the picks coming with many buys September 23, 2010
Posted by Marlowe Cassetti in DIA, QLD, QQQQ, SPY, SSO.trackback
As I stated in Wednesday’s Blog, there were five new RSI picks that I didn’t have the opportunity to cover. This entry covers them.
Let’s look at the new picks:
- Buy 387 shares ProShares Ultra S&P500 (SSO); Stop = -$2.58 Target = +$5.16 Volatility = 6.63%
- Buy 215 shares ProShares Ultra QQQ (QLD); Stop = -$4.63 Target = +$9.27 Volatility = 7.10%
- Buy 544 shares PowerShares QQQ (QQQQ); Stop = -$1.84 Target = +$3.68 Volatility = 3.77%
- Buy 305 shares SPDR Dow Jones Industrial Average (DIA); Stop = -$3.28 Target = +$6.56 Volatility = 3.05%
- Buy 255 shares SPDR S&P 500 (SPY); Stop = -$3.92 Target = +$7.83 Volatility = 3.45%
Here are some interesting observations that apply to all:
- They represent the overall US market
- They favor large capitalization stocks
- They include Ultra, that is double leveraged, funds
- They are all trading at the high end of their price channels
- They all were picks from the same module that tracks money flow
If you run the numbers, you will find that the number of shares times the fund price is much greater that position size generated by other RSI modules. This is a function of RSI’s “equal risk” strategy that risks one R per position. Thus a much smaller adverse price change would cause a stop loss sell. All this is perfectly clear, I presume.
Their charts follow:
As mentioned earlier these charts illustrate the fact they are trading at the high end of their price channel. Wait for a correction and then buy that dip.
Catch you later.
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