By Beau Wolinsky
In April we saw the market reach an overbought level and took a short position in ProShares UltraPro QQQ (NASDAQ:TQQQ). The precipitous drop that followed was due to socialist election gains in both Greece and France, and we managed to identify the worst 5 day period for NASDAQ-100 (INDEXNASDAQ:NDX) stock indices with this trade.
We are expecting to close our position in TQQQ with one of our largest profits ever. While I’m disappointed in the annual performance of the Quantitative EFT model, my estimation of the average profit is about 8.5%, versus an average loss of 11%. The win percentage is also much higher in the backtest than the live results show. The overbought condition means that we expect the market to reverse to an oversold level, and that appears to be what has happened during the short in TQQQ through early May. Read More
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