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Well, got a few points back on this last trade (from entering the long too
early) and we went short the S&P futures this morning. This trade is
contrary to our Intermediate Term Signal (which is still long) but is a
valid sell, so here we go.
My brother also sold all of our stocks this morning and went to cash
(actually a CA non-taxable bond fund).
My brother is getting pretty good at this stock trading business. He
currently uses Value Line to help select the hot industries when we get our
signals and then selects stocks within these industry groups. He trades
stocks to the up side whenever our short term and intermediate term signals
are in agreement. Whenever our signals disagree and we get a signal against
the Intermediate Term Signal (like today), he goes to cash equivalents (we
hate to give anything back). When we get sell signals in both our short and
intermediate term signals, he shorts the QQQ, the DIA and the SPY and not
physical stocks (less volatility that way).
Anyway, it seems to be working fairly well. With our early buy signal
causing us some grief in January, we ended up +10% in January (down from the
+30% we were ahead up until the last week) and are up another 10% so far in
February. This is 10% of total capital invested in stocks (and not 10% of
the total actually invested using margin) and doesn't count interest income
or our futures trading, which is spread over 4 different accounts (I think).
His target is to make 200% this year trading stocks. If we can keep the
system rolling along, he might actually do it. That figures out to be a
fairly substantial number. I don't have the 1999 stock results yet from him
(and he doesn't have the 1999 results from me yet for futures trading
either) but I suspect he made 30 or 40% for his first 6 months of trading
and that included giving a lot back while he developed his methodology.
My brother is also taking 50% of his profit out of the market monthly from
one of his futures accounts that he uses for living expenses or whatever. I
tell my sister-in-law that it supports a girlfriend. :) He just bought a
lot near Monterey on a golf course (he now lives on a golf course too) and
is planning on building his retirement home there in 3 years. Me, I'm stuck
here 5 blocks from the ocean for a while, as I have a 9 year old in 4th
grade at home. My brother has his first grandchild (she's one now) and I
must say I'm a little jealous.
Anyway, that's where we're at right now. I will keep posting our trading
here for a while, but I am starting to look at setting up a web site. That
way, if we ever decide to, we can make a business out of it.
My brother and his better half will be in Hawaii next week (no kids at home
and no pets) and will be trading using the new laptop he bought. I'll be
managing the futures trading from here. In a couple of weeks, he'll be in
Taiwan and plans on going to cash for the week since his ISP doesn't provide
any access ports there.
Good Trading,
Guy
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