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

Mechanical Investing FAQ

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