Another positive week for the NASDAQ 100 (up 1.1%) resulted in another 2% gain for STF as it remains 2X long. Early in the week, this looked to be a pretty poor choice as weakness in Apple, in particular, caused the NASDAQ 100 to underperform the S&P 500 and Dow Indices. The NASDAQ 100 has been in a relatively strong channel recently, so if that trend continues, we may see a close this week above 2655.
Why does our Self-Adjusting Trend Following strategy stay 2X long against a market that in the short term is clearly going down and an index that has broken through support levels like the 50-day moving average? Why not reduce the risk in the portfolio during events like the last three weeks? It may have been frustrating to watch 2X losses pile up since April 2nd, but Wednesday is why STF is patient with the market and more focused on the trends than the individual bit of information like today’s price of the market. The NASDAQ 100 rallied almost 3.9% from Tuesday’s close. The overall trends utilized in STF have not broken down this year, and until they do, STF will persistently hold to those trends.