FedSwing – a new swing system
“Don’t fight the Fed” may be something you have heard at some point. It appears to be a good adage to follow. After observing the market’s behavior during QE1 and QE2 I started research into this (see this post). FedSwing is a result of that research.
FedSwing is a swing trading system that is counter-trend in nature and is used for stock indices. It will not go long when the Fed is selling and will not go short when the Fed is buying. It uses a stop-loss that is the smaller of a volatility based stop or money management stop ($3000 for stock index futures). It is being offered for trading the S&P MidCap 400 (EMD), S&P 500 (ES) and Russell 2000 (RL). It can be traded on the Dow (YM) and Nasdaq (NQ), but because of their low contract size they aren’t worth trading in my opinion even though they have profitable results on both (I’ve removed YM and NQ from MeanSwing II as well) .
FedSwing is uncorrelated to the MeanSwing II systems (5 year correlation ranges from -0.15 to 0.16) and has very low correlation with the intraday systems (5 year correlation ranges from -.07 to 0.41). This makes it a very nice fit in the Index Trader portfolios!
For 5 year performance information please go to the website pages for Systems or Portfolios.
To give you the most recent results, here is the performance for each FedSwing system and the updated Index Trader portfolios:
Hypothetical Results – 1 contract per trade | |||||
(commission and slippage included, see Info/Disclaimers in top menu) | |||||
Month | Year | Past | |||
System | to-date | to-date | 12 months | ||
FedSwing EMD | $ 2,980 | $ 1,140 | $ 28,600 | ||
FedSwing ES | $ 1,348 | $ (453) | $ 13,520 | ||
FedSwing RL | $ 3,600 | $ 7,010 | $ 29,510 | ||
Month | Year | Past | |||
Portfolio | to-date | to-date | 12 months | ||
Index Trader I | $ 4,610 | $ 5,790 | $ 40,340 | ||
Index Trader II | $ 7,040 | $ 2,860 | $ 62,130 | ||
Index Trader III | $ 7,170 | $ 493 | $ 61,235 | ||
Index Trader IV | $ 8,418 | $ (810) | $ 81,085 | ||
Index Trader V | $ 8,598 | $ (6,620) | $ 83,755 |