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Strategies & Market Trends : The New SEctor SPDR Funds

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To: pcyhuang who wrote (39)1/23/1999 3:50:00 AM
From: pcyhuang  Read Replies (2) of 122
 
A Trading Model for the SPDR funds

Hi, All:

The SPDR funds with the best relative performance since Dec. 24 have been the XLK, XLV and XLY. Now a consistently profitable trading model may be constructed as follows:

1. Divide your available capital into six equal parts.

2. Invest 3 parts or 1/2 of your available capital into a short position of the DIA (Depository Receipts of the Dow Jones Average, traded on the AMEX.

3. Invest 1/6 of your capital in each of the three top-performing SP
DRs -- XLK, XLV and XLY.

4. Monitor the position on a weekly basis. If the relative performance of one or more of the best-performing SPDRs fall below the top five relative ranking, sell the SPDR(s) and invest the proceed in the new top ranking SPDR fund(s).

This model is assured of an arbitrage profit over time. Any comments?

Rgds,

pcyhuang
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