Early Warning Alerts

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Welcome to the Index ETF Early Warning Alerts page.  Updated through 2016

Focused on providing alert timing for non-leveraged and leveraged Index ETFs:  SPY, QQQ, IWM, UPRO, TQQQ & TNA.  Because our back testing was completed only on the IWM this will be our featured ETF for text and email alerts in 2017.  There may be occasional focus on the inverse Index ETF’s when market condition favor downside movement.

Hi Mike and Dennis,
     I was reviewing my year to date for Early alert trading and it’s up 21% for the year. It is a small account that started with a little over 12K, but I traded with the alerts when I was comfortable and had a positive results. Thank you both.
D.C.

The Early Warning Alert System hit 100% of all significant market swing lows in 2016.  On the video below Mike and I discuss 2016 performance.  2016 was a challenging year due to so many of the Alert Triggers not being followed by traditional technical entry triggers.  This phenomenon had not shown up in our back testing from 2002 through 2014.  We reassessed triggers to see if there was an additional entry trigger that would optimize entries.   We found this optimized entry.  We repeated our back tested using this optimized entry trigger.  We also expanded the back test to include the time period from 2002 through 2016.  Our objective for 2017 is to achieve results which come closer to reaching the System’s potential. 

This update for 2016 highlights both the actual performance of the EWAS plus provides what the back testing showed trading TNA for each of the Alert Triggers.  Other insights that emerged from our 2016 performance analysis include:

  1.  Mike and I take serious our responsibility to our members, and occasionally were overly cautious 
  2. While the EWAS can be used with any or the Index ETFs or Leveraged ETFs, all of our back testing was done using the IWM which relates directly to trading either TNA or TZA.  Trading the other Index ETFs in the future will be the decision of individual members.  To avoid confusion, Mike and I will focus on the Russell 2000 and its associated ETFs
  3. Stop losses based on swing lows work best in case the initial entry signal does not work
  4. Letting the trades mature properly.  In our back testing we found that the optimum hold time after entry was 20 Trading Days or between 27-29 calendar days.   The results of the back testing completed in December reaffirmed this design characteristic
  5. Inverse Leveraged ETFs and Secondary Entry opportunities can be used when technical indictors provide trading opportunities.  These setups will be called when appropriate as a courtesy to EWAS members    

The optimization now in place will benefit all members.  Each member can track their trades and objectively set stop losses and holding periods.  We will no longer put out standby alerts.  Instead we will provide text and email alerts after an actual trade alert has triggered.  We expect between 3-7 alerts per year based on historical data.  Remember that with any trend following system there will be both winning and loosing trades.  We will continue to objectively limit the downside and be patient as the system works out the winners.

Mike and I have recorded a video highlighting the 2016 performance.

 

 


 

Back Test Results at Bottom of this page.

Last Long Alert:  Nov 2, 2016

Current Condition:  Waiting Entry Signal


 2016 Trades (Full Positions)


Back Tested Trades using TNA for 2016

 


 

Back Testing Results 2002 through Oct 2016 Trading IWM Non-Leveraged Russell ETF

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