The IBD Experiment: Trade $100k into $1M In (4) Years

It has been a positive month, this January. After 4 declining months, thus far Jan 2012 is +5.5% for my futures system. Also the trading system is +19.53 since inception, nearly 16 months ago.





You seen us contrasted with these couple other highly-regarded funds: CANSLIM Private Clients (http://www.canslimpc.com/MonthlyReport.pdf) off 10% in 2011...



and Bouchard Capital (no affiliation, http://autumngold.com/Advisor/Statistics/cta_profile.php?id=113479) +4.80%



- G

 

The Technical Indicator: January uptrend meets major resistance

CINCINNATI (MarketWatch) — While the January rally has been technically impressive, the Dow Jones Industrial Average and the Standard & Poor’s 500 Index have both risen to significant resistance.

http://www.marketwatch.com/story/january-uptrend-meets-major-resistance-2012-01-24?pagenumber=1

The specific levels hold at Dow 12,750 and S&P 1,320, and the response to these areas should set the near-term technical tone.

Before detailing the U.S. markets’ wider view, the S&P 500’s hourly chart highlights the past three weeks.

The S&P briefly touched five-month highs in Monday’s action, topping intraday at 1,322.

It remains within a near-term uptrend, and first support holds at 1,308.

Meanwhile, the Dow industrials’ near-term backdrop is similar.

In its case, the blue-chip benchmark has briefly touched eight-month highs before pulling in modestly.

With Tuesday’s downturn, initial support holds at 12,625, and is followed by a deeper floor around 12,570.

And the Nasdaq Composite has also sustained last week’s breakout.

Notice that the index bottomed Monday at 2,770 — matching gap support — though a deeper, and more significant, floor holds at the October peak of 2,753.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has sustained a break to five-month highs.

Again, significant support should hold at its breakout point — the October peak of 2,753 — and this area would be expected to draw buyers on the first retest.

Moving to the Dow, the blue-chip benchmark has risen to a serious technical test.

Namely, it’s challenging the July peak of 12,753, a level matching its pre-crash high.

The index topped Monday at 12,764, and has pulled in from resistance.

And the S&P 500 has also risen to a significant overhead.

It’s challenging trendline resistance just under S&P 1,320, and this area remains the bull/bear battleground.

The index topped Monday at 1,322 before pulling in to close at 1,316.
The bigger picture

While the January rally has been technically impressive, the Dow industrials and the S&P 500 have both risen to significant resistance.

Returning to the Dow’s six-month view makes the point.

As illustrated, the index is retesting the July peak of 12,753, a level matching its pre-crash high.

Consider that the index topped Monday at 12,764, and has since pulled in from resistance.

Meanwhile, the S&P 500 is challenging overhead just under the 1,320 mark, matching a longer-term trendline from the October peak.

Again, the S&P topped Monday at 1,322 before pulling in to close at 1,316.
Summing up the backdrop

Collectively, the Dow industrials and the S&P 500 have both reached significant resistance.

Against this backdrop, each benchmark is near-term overbought — the S&P has risen 4.7% across just three weeks — and a consolidation phase is overdue.

So as always, the near-term question is the response to resistance.

Namely, if the major benchmarks can hold tightly to resistance, the chances of immediate follow-through improve. Conversely, a strong-volume downdraft likely signals a more pronounced consolidation phase.

(As reference, resistance at the October peak marked a comparable technical test.)

But setting aside near-term questions, the longer-term trend points higher, and this is a market to buy on pullbacks to support. The S&P’s first significant floor holds at the October peak of 1,292.

 

http://www.marketwatch.com/story/sp...rts-bull-view-2012-01-31-1146410?pagenumber=1

So collectively, the major benchmarks have reached resistance, and a consolidation phase is underway.

Nonetheless, the intermediate- to longer-term trends technically point higher pending signs of sell pressure as measured by volume and market breadth. A violation of the S&P’s breakout point — the October peak of 1,292 — would be cause to reconsider.

Meanwhile, January capped with big gains.

My Futures System: 7.3%
My Stock System: 7.7%

pay$

 

Finally a "Bottom"?

For the first time, since the Fed intervention in 2007, 2012 feels like a market whereby the bottom in the economic cycle can be felt.

http://www.marketwatch.com/story/us-adds-243000-jobs-in-january-2012-02-03

"The U.S. gained 243,000 jobs last month and the unemployment rate dipped to 8.3% as nearly every sector of the economy added workers, the Labor Department said Friday."

PS Indexes solidly break through overhead resistance, further confirming this uptrend.

 

How are we doing?

After about 16 months of careful trend-following our futures system (& stock system) continue to build gains.

Since inception: +23.2%

We've again are finding our way out of drawdown, now moving past the halfway point.

- G

PS We did not experience the average drawdown that occurs mid-shift from going SHORT to LONG this last time.

 

The Technical Indicator: Nasdaq sustains break to 11-year highs

CINCINNATI (MarketWatch) — After breaking out last week, the “expected” selling pressure has been conspicuously absent.

http://www.marketwatch.com/story/na...11-year-highs-2012-02-07-1131190?pagenumber=1

Against this backdrop, each major U.S. benchmark has confirmed its uptrend, and the incremental upside from current levels could be meaningful. The charts below add color:

The S&P 500’s hourly chart details the past two weeks.

The S&P has sustained a break to six-month highs.

From current levels, initial support rests at its breakout point of 1,333, and is followed by a more significant floor at 1,322, better illustrated on the daily chart.

Conversely, initial resistance holds at 1,345, matching this week’s high and the late-July peak.

Meanwhile, the Dow industrials’ near-term backdrop is similar.

In its case, the blue-chip benchmark briefly touched a three-year closing high last week.

But practically speaking, it’s challenging resistance at the January peak of 12,842.

And the Nasdaq Composite remains the current market leader.

Consider that it’s gapped to 11-year highs, sustaining the breakout across two sessions.

Looking ahead, initial support holds at 2,885 — matching the top of last week’s gap — and is followed by a deeper floor at 2,868.

Widening the view to six months adds perspective.

The Nasdaq remains near-term overbought following last week’s spike to 11-year highs.

While its steep 2012 rally is longer-term bullish, a consolidation phase is likely in order.

From current levels, initial support spans from 2,868 to 2,885 — illustrated on the hourly chart — and is followed by a deeper floor at the January peak of 2,834.

Moving to the Dow, the blue-chip benchmark has also broken out.

On this wider view, initial resistance spans from 12,870 to 12,876 matching the 2011 peak.

Conversely, first support holds at its breakout point, around the July high of 12,753.

And the S&P 500 has also cleared significant resistance.

Namely, the index has knifed from trendline resistance, notching two straight closes at 1,344.

This level matches its next significant overhead — the July 2011 peaks — spanning from 1,345 to 1,356.
The bigger picture

As outlined above, the U.S. markets have confirmed their uptrend.

In fact, each major benchmark has cleared significant resistance as follows:

* The Nasdaq Composite has knifed to 11-year highs. Its former one-decade range top held at 2,887, matching gap support on the hourly chart.
* The Dow Jones Industrial Average has notched a three-year closing high. Its former three-year closing peak held at 12,810.
* The S&P 500 has cleared trendline resistance. Its first notable support now holds around 1,322 — matching the trendline — and a breakout point on the hourly chart.

Against this backdrop, the Nasdaq Composite’s breakout is the most technically notable.

The Nasdaq’s monthly chart — spanning 25 years — makes the point.

Four inflection points stand out:

* The 2011 peak of 2,887 matching gap support on the hourly chart.
* The 2001 peak of 2,892.
* The December 2000 peak of 3,028.
* Resistance at 3,120, matching a 50% retracement of the dotcom bust.

So roughly speaking, initial Nasdaq support spans from 2,887 to 2,892, bracketing the 2001 and 2011 peaks.

And on a sustained break higher, the incremental upside could be significant.

Consider that an intermediate- to longer-term Nasdaq target rests at 3,120, matching a 50% retracement of the Internet crash.

This target holds about 7.7% above current levels.

Summing up the backdrop

All told, the U.S. markets are near-term extended, and a consolidation phase is underway.

But more importantly, the major benchmarks remain within a strong uptrend, and this is a market to buy on pullbacks to support.

The S&P 500’s first significant floor holds at 1,322, and should be a useful bull/bear gauge.

- G

 

Having recently passed a full 16 mos. of trade, our gain since inception now totals <b>24.67%</b>.

Our current OPEN position has captured nearly <u>300 NQ points</u> or almost <b>$12,000</b>, indeed catching the most recent trend smartly.

Time and again we've reached new highs and overcome drawdown, further proving the concept.

And we continue to frequent C2's "HOT" systems list.

Thank you for following the <b>"IBD Experiment"!</b>

 

Wow! We did it again. These two stellar long-term trading systems came in <i>less</i> than our Futures & ETF system January returns (more info at Profile).

My Futures system JAN performance: <b>7.3%</b>



My ETF system JAN performance: <b>7.7%</b>



<b>CANSLIM Private Clients</b> (no affiliation)



<b>Bouchard Capital</b> (no affiliation)



prior CTA returns...



Bouchard Capital (EXLENCE) returns at C2...



more Bouchard Capital info (http://autumngold.com/Advisor/Statistics/cta_profile.php?id=113479)...



[for comparison, no affiliation with CANSLIM Private Clients, Bouchard Capital or EXLENCE]

 

More comparisons...

It must be nice. CANSLIM Private Clients (back- & forward-test) has witnesses an oh-so modest S&P 500 <b><i>10-year</i></b> return. However amidst the couple 2-3 year dips, this fund has multiplied 3.5 times.

True, that <i>only</i> amounts to a 12.92% compounded annual return, but I'm sure most everyone would have taken that past-decade return.

It's also true that Bouchard Capital (formerly tracked at C2 or Collective2.com as EXLENCE, no affiliation) <b><i>had</i></b> a 130% compound annual ROR for about 3 years - has since performed at a 10.19% annual rate!

Interestingly, we did better than most (in top 5: http://autumngold.com/Statistics/RankingReport.php) last month, even though Advisors (for the most part, as tracked by long-term CTA indexes) consistently compound gains throughout many years (and reap up to 40% of returns plus 2% fees).

- G

PS We are still at the low end of CAGR, now around 20%. Over 10 years, using covered calls, we sported a 50% annual average (LONG only). Now capitalizing both LONG & SHORT, our long-term CAGR expectation is (minimally) at around 75% average per year.

PSS Also compare our max drawdown.

 

The comparison to the Autumn Gold rankings is laughable. C2 trades are not real.

Also, per your ps, none of what you're saying was ever validated by any third party, including me. I know that the 50% annual average you're claiming is probably forged, and the "CAGR expectation" is also completely exaggerated.