Saturday, July 24, 2010

Warning - Round Trip!

The other day I recieved a warning from Fidelity warning me about a round trip exchange.  A round trip is defined as an exchange in and out of a fund within 30 days.  This can result in suspension of exchanging priveledges if done excessively.  Therefore, I am adding additional analysis that attempts to filter for volatility.  The signal recieved on 6/14/2010 and then the signal to sell on 6/30/2010 resulted in a loss, and then the market corrected significantly.  However year-to-date oracole has still outperformed the fund. I am currently sitting on the sidelines until I can improve the oracole strategy.  Below is an image of a draft of the tech tool I am creating (green dots represent buy and red dots represent sell signals):

I feel that I am very close to having a fantastic signal generating tool.

Saturday, July 10, 2010

Performance Track

I have started tracking the performance of two mutual funds and one stock that I own based on applying the oracole formula.  The table below compares results of fund or stock performance vs. portfolio performance if the oracole formula is applied.











Currently all of the funds are in a hold pattern (waiting for a buy signal).  As stated in my introduction there is no gaurantee that a loss will not occur. Therefore, it is good that this post shows the previous transaction generated a loss.  The approach to this strategy is that you preserve the wealth you have when the market signals a potential trend downward.  However, I believe that over a long period of time the oracole formula will generate returns that out perform fund or stock performance.

One important point to be made is that the %Gain or %Loss (% G/L) for the Oracole YTD Return are realized gains or losses.