what we do
Our focus is on the development of proprietary geodesic models that characterize the behavior of leveraged long/short ETFs in pairs trades using first principles of Hamilton-Lagrange-Euler mechanics. Because of tracking errors & daily compounding phenomena, equal weightings of leveraged ETFs in a pairs trade are virtually never 50-50. Daily data & graphics will show subscribers where neutral pair weightings have moved along the path of the pairs geodesic thereby providing multiple market direction & re-balance indicators.
SDS-SSO subscriber update - April 22, 2009
Dear Blogger, - thank you again for subscribing to the S&P 500 long/short ETF Model and welcome to all new members that just joined. the latest analysis is available for download. click here to browse the directory or click the link below to download just today's update.
- today's filename is: SDS-vs-SSO-20090422-subscriber.xls - ignore the missing data error message that may pop-up when opening up the file and click OK. there are no macros in these spreadsheets but it would not hurt to virus scan the file before you open it.
- if you ever misplace your login, i can send your info if you email me a message from the original email address you provided when subscribing through paypal.
- visit the blog for an archive of all subscriber updates and alerts. the archive is searchable and comments can be posted as well.
| | | Today's Commentary
as i indicated on my seekingalpha instablog, the bears managed to lower the market in the last hour of trading today. i think the selling caught buyers by surprise. the market sold off mid-day after a decent run-up from negative territory and then rallied higher by mid-afternoon when the selling started again. the s&p 500 went down in the afternoon as fast as it went up at the opening.
(chart of the S&P 500 intraday)
from my limited perspective, i don't see anymore catalyst for the rally to continue since the mar-09 lows. buyers seem to be desparate to drive up stock prices higher in the face of terrible economic news in the short & long term. the rally has been a nice relief but nothing goes straight up or straight down. i believe we are still in an overall declining market scenario.
the chart below shows, on a daily basis, the s&p is bouncing around it's bollinger band mid-point. this is as good as any signal to sell. volumes have been increasing since apr-9 or so. a couple more days of choppy markets will probably break the will of buyers spirits.
(S&P 500 on a daily basis for 6 months)
from the model point of view, the PID value is still positive but only slightly so. the polarity chart in the analysis is showing signs of switching bias to faster relative daily growth of SDS compared to SSO. in the past several weeks, bias has approach the switching point and backed off 2 other times. we're at the same point and i expect by friday we'll see a new market direction change.
we're still in the proverbial "no-man's land" so i wouldn't be looking to change any positions in the pair until we know for sure where the market is going after the next couples of days. so basically stay put and wait for the market to change before adding any new money to the pair or re-balancing. | | |
Disclaimer
Equity Informatics is a developer and service provider of proprietary financial equity pricing models & trading methods. The company familiarizes subscribers with the basic thesis of our models, provides subscribers with daily neutral pair weightings and methodologies on how to use the data as intended. subscribers shall not share any information obtained from equity informatics with any other party. use of these services are granted only to and intended for the benefit of the subscriber. Equity Informatics does not offer the sale of equities nor do our trading models constitute trading advise. It is incumbent on potential clients to perform due diligence and seek a professional financial adviser to help you determine whether subscribing to the company's services are suitable for your financial situation and level of risk. No guarentees of performance are expressly or implicitly offered nor does Equity Informatics guarantee the accuracy of market information used to provide model data to our client. equity informatics does not assume responsibility for lost principal, lost gains or tax consequences.
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