We blew through the band. So much so its a scary buy.

This is one of those times when following a system keeps you awake. The QQQQ BB system signalled a buy and has gone nowhere but down from there. When I modelled the system the losses from such days were cut dramatically when you bought the next day as it again closed below the lower BB. My only concern is that I've never been able to see the effects of a crash in this system.
I seem to remember something Larry said or quoted someone else as saying that there has never been a crash that occured while the 50 dmva was higher than the 200 dmva? Larry is that right?
I'd love to hear your thoughts on the Q's BB as it stands anyway.
Thanks,
Howard

Howard,

I don’t remember saying that, but it’s probably true for the most part . 1929 was certainly a crash. 1987 was certainly a crash. Was 1998 a crash? How about 2001 following 9/11? Some people would probably refer to last week as a crash. It depends on how you want to define a crash.

Obviously, if you get a really big downdraft in the market, the QQQQ/BB or the VTO are not going to work. And, obviously, if you wait until the next day you will come out better. But, also obviously, if you wait until the next day you will miss out on a lot of other profits that occur much more often than “crashes.”

The answer is that you diversify among systems. I bought some QQQQ on the signal. I also bought some on the VTO signal the following day. But I did really well last week. Why? My bread and butter -- the COT.

Larry

Larry,
Absolutely the COT saved the day and I'm not at all worried about waiting the 15 trading days to get out. I think I'd be happy I have a loss in the BB system becuase so much more money is in the ultra bear fund.
Speaking of the COT, would you remind us? Do we get unleveraged at the end of the week of a rise above the 40 mva or on any close above the 40dmva?
h

Howard,

End of week. It just cuts down on the number of switches to do it that way.

Larry

Larry,
If I'm not mistaken today was 15 days for the Bollinger Band trade. Should we have closed out the trade at the end of the day?

Jim

Jim,

That's correct. Today was the exit day.

Larry