Subject: Re: Managing Risk with Saul Picks
Juan stated: But maybe, investing in "SAAS stock" has different trends than SP500 stocks.
The chart I presented is for a long-term perspective and would work for SaaS stocks, and the US stock market in general. The trades I presented for SaaS stocks are traded within the framework of the long-term view. In other words, the actual parameters you use are significantly impacted by the long-term outlook. During a bear market your expectation is that your holding length will be shortened dramatically compared to a bull market. Your bias is on the short/inverse side. During a bull market your bias becomes bullish and you time holding a position is skewed to a longer length of time.
Juan asked: My question is, in order to create a good team of bullish and bearish indicators, do you backtest them with wide indices like SP500 or Russell 2000 or with more specific ETF's (might be WCLD if I want to invest in "Saul stocks" or IWM if we intend to invest in small-cap stocks).
All research is done based on the primary indexes - Dow30, SP500, Nasdaq Composite, NDX100, etc.
Another important component in trading the market is to know what to invest in. Every year I write a "Perspective" article that helps set the stage for the year. On 1/1/2023 I released this and stated: The optimal investment vehicles in PY3 are tech related universes (Nasdaq 100, Nasdaq, Semiconductors and Business Equipment). If historical precedent has anything to say about 2023, do keep this in mind.
Based on: 6/23/2023 YTD % YEAR % 104 Wk Low % Dif Symbol
United States Markets
The Nasdaq 100 34.91% 27.30% 10/13/2022 42.63% ^NDX
The Nasdaq 27.75% 20.12% 10/13/2022 33.74% ^IXIC
S&P 100 18.71% 17.26% 10/13/2022 29.12% ^OEX
Wilshire 5000 15.91% 18.22% 10/13/2022 26.39% ^DWC
S&P 500 12.85% 14.56% 10/13/2022 24.54% ^GSPC
Russell 1000 12.50% 14.08% 10/13/2022 23.73% ^RUI
Dow Transport 9.36% 12.70% 9/26/2022 22.95% ^DJT
Russell 3000 11.93% 13.64% 10/13/2022 22.94% ^RUA
Dow Composite 3.28% 10.62% 10/13/2022 18.09% ^DJA
Dow Jones Industrials 1.75% 9.94% 10/13/2022 17.68% ^DJI
SPDR S&P 1500 Value Tilt ETF 4.08% 10.80% 9/30/2022 16.63% VLU
NYSE Composite 1.87% 7.41% 10/13/2022 16.49% ^NYA
Value Line 4.03% 7.25% 10/13/2022 15.18% ^VLIC
S&P Mid Caps 3.48% 11.56% 9/27/2022 15.05% ^MID
Russell 2000 2.93% 6.42% 6/16/2022 10.98% ^RUT
S&P Small Caps 0.25% 4.35% 9/27/2022 10.25% ^SML
Dow Utilities -6.88% -3.56% 10/13/2022 9.57% ^DJU
AMEX Select Sector SPDRs YTD % YEAR % 104 Wk Low % Dif Symbol
Energy -9.27% 13.98% 8/19/2021 86.99% XLE
Technology 34.67% 32.19% 10/13/2022 50.38% XLK
Consumer Discretionary 27.98% 18.01% 12/28/2022 31.98% XLY
Industrial 5.40% 22.48% 9/30/2022 26.43% XLI
Materials 3.34% 10.67% 9/27/2022 21.08% XLB
Consumer Staples 0.09% 5.92% 10/10/2022 13.64% XLP
Health Care -2.13% 5.55% 6/16/2022 13.45% XLV
Financial -4.06% 7.18% 10/13/2022 12.40% XLF
Utilities -6.60% -1.19% 10/13/2022 10.34% XLU
US Industry Indices YTD % YEAR % 104 Wk Low % Dif Symbol
Semiconductors 42.83% 43.89% 10/13/2022 78.77% SMH
Oil -9.20% 6.81% 8/19/2021 76.71% ^XOI
Disk Drives 44.25% 47.52% 10/13/2022 67.63% ^DDX
Computer Technology 49.73% 40.99% 10/13/2022 59.67% ^XCI
Oil Services -9.07% 15.13% 8/19/2021 59.01% ^OSX
Computer Hardware 33.22% 30.50% 10/13/2022 56.22% ^HWI
Airlines 41.76% 31.34% 10/3/2022 51.58% ^XAL
First Trust Dow Jones Internet Index 27.60% 21.06% 11/4/2022 38.93% FDN
Technology 17.31% 21.82% 10/13/2022 35.67% ^PSE
Gold -2.98% -1.11% 9/26/2022 32.05% ^XAU
Biotechs 3.14% 22.07% 6/14/2022 31.19% ^BTK
PowerShares DB Commodity Tracking ETF -5.95% -16.00% 8/20/2021 28.84% DBC
Broker Dealers 3.69% 23.17% 6/16/2022 28.08% ^XBD
Retailers 22.98% 19.29% 11/9/2022 27.82% ^RLX
Network 4.22% 20.20% 7/5/2022 24.68% ^NWX
Insurance -3.75% 10.35% 7/19/2021 21.35% ^IUX
Drugs 0.86% 8.07% 9/28/2021 20.06% ^DRG
Chemicals 3.34% 9.77% 10/13/2022 19.56% ^CEX
iShares U.S. Healthcare ETF -1.63% 5.48% 6/16/2022 13.93% IYH
Banks -22.83% -23.22% 5/4/2023 11.45% ^BKX
Utilities -7.59% -1.40% 10/13/2022 8.96% ^UTY
iShares U.S. Telecommunications ETF -4.36% -12.18% 10/13/2022 8.85% IYZ
REITs -3.40% -9.78% 10/13/2022 8.17% ^DJR
S&P Banks -12.56% -9.01% 5/4/2023 8.14% ^BIX