Back on 11/23/2021 I posted on the Saul Investing board, and here on the Mechanical Investing board a relatively simple way to manage risk by using overbought / oversold indicators built off of the Software as a Service sector. The method finds times when these four groups of stocks become way overbought to produce a sell and way oversold to produce a buy.

1. Cloud Computing
2. SAS SIC Code Based
3. SAS via ETF holdings
4. Saul Picks

I then combine the results to arrive at a consensus to produce signals. The following are the results for 2022. When a buy signal is issued the Saul Picks are held equal weighted, and when a sell signal is issued the same Saul Picks are shorted.

Date  Signal  P  % G/L
1/5/2022  BUY  L  2.51%
1/12/2022  SELL  S  10.75%
1/18/2022  BUY  L  2.89%
1/31/2022  SELL  S  7.56%
2/22/2022  BUY  L  6.55%
2/28/2022  SELL  S  19.78%
3/7/2022  BUY  L  17.79%
3/18/2022  SELL  S  44.97%
5/11/2022  BUY  L  14.97%
5/27/2022  SELL  S  13.94%
6/14/2022  BUY  L  17.34%
6/23/2022  SELL  S  7.51%
6/30/2022  BUY  L  15.58%
7/7/2022  SELL  S  12.70%
7/14/2022  BUY  L  12.56%
7/20/2022  SELL  S  12.87%
7/26/2022  BUY  L  23.75%
8/3/2022  SELL  S  8.03%
9/1/2022  BUY  L  10.50%
9/9/2022  SELL  S  15.92%
9/23/2022  BUY  L  9.03%
10/4/2022  SELL  S  15.63%
10/11/2022  BUY  L  4.62%
10/18/2022  SELL  S  20.01%
11/4/2022  BUY  L  17.69%
11/11/2022  SELL  S  10.24%
11/21/2022  BUY  L  4.59%
12/1/2022  SELL  S  10.12%
12/6/2022  BUY  L  17.46%
12/13/2022  SELL  S  9.07%
12/19/2022  BUY  L  2.11%
12/31/2022  END    

What is most remarkable about the strategy is that there were no losing trades throughout 2022.

When I posted this idea on the Saul Investing board it was deleted almost immediately. They would have none of it. Such a simple method, but some dogs just won't learn new tricks!

I would suggest that during high volatility bearish periods the most gains are had trading on both sides of the market, and this requires learning some new tricks now and again.

Zee

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