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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: LemonHead who wrote (9581)12/17/1999
From: fuzzymath   of 18928
 
How I trade (forgot to answer your second question!): from November - January, I am fully invested, based on the results of my "January Effect" study. But, if anything truly weird happenned, I'd step out of the market.

The rest of the year I am a short term trader. Most of my investment money is profit sharing in a tax-deferred account. It's with Fidelity. When I trade, I trade the entire portfolio -- either into cash or back into the market. Right now, I'm using FDEGX when I'm in the market.

For people who would have to pay commissions, I would recommend buying index puts to hedge your portfolio if you wanted to use my methods.

I'm conservative, so I normally stay in the market only when my models yield a Green light. The alternative is to only hedge when the light is Red, indicating that the models unanimously view a position in cash as likely to outperform a position in the stock market.

Note that the models are of the NYSE Index. Right now we have a huge divergence between the NASDAQ and broad market (NYSE).

The models would support a pruning method--but Fidelity doesn't like lots of trading, so I use the all or nothing approach with them.

Kevin
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