Friday, October 15, 2010

10/15 Slow Trading

  • SPY within 47¢ of a bull crossover.

D $41.06 $43.94
EEM $40.98 $42.92
GLD $116.26 $124.34
IDCC $26.71 $27.21
JNK $38.98 $39.42
NLY $17.47 $17.72
QQQQ $46.43 $47.13
SPY $112.25 $111.78
USO $36.39 $33.98

  • ma50 - 50-day simple moving average
  • ma200 - 200-day simple moving average


My strategy for slow trading uses the 50-day moving average (a quarter) and the 200-day moving average (a year). It has these rules:

a) When the 50-day moving average crosses above the 200-day moving average, open a bull position.

b) When the 50-day moving average crosses below the 200-day moving average, either move to cash or open a bear position.

The short version: 50-day-ma above the 200-day ma = bull phase. 50-day-ma below the 200-day ma = bear phase. Simplicity itself. It is important to note that new positions should be opened at the time the signal is given. If the stock is in the midst of a phase, then keep your money on the sidelines until a new phase kicks in.

For my own account, I tend to trade the bull side only, as I find that to be more reliable over the longer term.

Potential Slow Trades

Here are the stocks and exchange-traded funds (ETFs) that I’m following as potential candidates for slow trades.

  • D is the Virginia-based electric utility Dominion Resources. Dividend: 4.2%
  • IDCC is the Pennsylvania-based digital wireless tech company Interdigital Inc. No dividend.
  • NLY is the New York-based real-estate investment trust Annaly Capital Management. Dividend: 15.5%

  • EEM tracks emerging markets. Dividend: 1.2%
  • GLD tracks the metal gold. No dividend.
  • JNK tracks high-yield corporate debt. Dividend: 8.6%.
  • QQQQ tracks the Nasdaq 100, usually called the "tech-heavy Nasdaq". Dividend: 0.9%.
  • SPY tracks the S&P 500, usually called the blue chip stocks. Dividend: 2.1%.
  • USO tracks crude oil. No dividend.

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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