2024 Trading Strategy 01212024

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Hello, everyone. It's Stephen Whiteside here from

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theuptrend.com, and I hope everyone had a wonderful weekend.

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In this presentation, I thought we'd spend

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some time talking about a Trading Strategy for 2024.

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Now, at the start of the year, everybody

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wants to know everybody's predictions, and I really don't want to make any because I

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really don't know which way the market is going to go.

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I can give you a very strong bullish case.

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I can also give you a very strong bearish case.

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At the end of the day, we're here to follow the money.

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If we can follow the money in both

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directions, then it's a lot easier to make money at the end of the year.

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We can do that by using Leveraged ETFs.

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We really don't care if the Bulls or the Bears win Over the short term.

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Of course, over the long term, the Bulls

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always win because the market is designed to go up over the long term.

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But in the short term, the market can go down.

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It can go down sharply.

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And if it wants to go down, we can make money as it falls

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and not have to worry about which way the market is actually going.

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Having a strategy based on the market always going up, works over the long term,

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but it certainly can be dangerous over the short term.

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Now, the leveraged ETFs come in pairs.

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You have a bullish one and a corresponding bearish one.

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We can be basically market neutral, not

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caring whether the market goes up or goes down.

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If the market is going up, we can be long the bull ETF.

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If the market is going down, we can be long the bear ETF.

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We can also be diversified.

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We can pick multiple indexes to follow.

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We can also look at different sectors of

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the market that we can either be long or short in.

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It's up to you which ones you want to be involved in.

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We are first going to start off looking at

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the US market and some US examples, and then we're going to move on to the

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Canadian market and some Canadian examples.

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Starting off in the US, looking at the S&P 500 Index.

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On Friday, it was up 1.23%.

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Now, the corresponding ETF, which is the SPY, which is a 1X ETF.

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It's not a multiple of the S&P 500, it is an S&P 500 equivalent.

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It was up a couple of ticks more than the

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index itself, so 1.25%. Now, leveraged ETFs come in multiples of

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that, so either a 2X, 3X, or a brand new, the 4X ETFs.

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In Canada, we have 2X ETFs available to us.

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In the US, the most popular are the 3X,

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and 4X ETFs just came out recently, and not many people are using them so far.

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Now, I always recommend that you have a basket of these ETFs.

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Typically, you're looking at five areas of the market and with a bull and a bear ETF.

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So there's two ETFs for each of your choices.

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And we'll take a look at some of those in a minute.

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But these are trading tools.

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They're not investing tools.

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And so they are not equivalents.

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If you want to be a long term investor in

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the S&P 500, the SPY would be the best solution.

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Using the leveraged ETFs, they can lose

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money over time depending on how many times the market changes direction.

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We're specifically talking about a short term trading strategy here.

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We're not talking about an investing strategy.

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Looking at the 3X Bull ETF for the S&P

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500, if the S&P 500 was up 1.23%, a 3X Bull should be up 3.69% on Friday.

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Well, in fact, the 3X Bull ETF was up 3.62%, so just a few ticks below what our

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target price would have been, but that's pretty close.

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The flip side of that is that the 3X Bear ETF was down 3.72% on the day.

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So again, we've got the opportunity to be

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either long a Bull or long a bear ETF for each one of these markets.

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Now, the rules are the same and they're pretty simple.

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A Buy signal is the first close above the upper channel line, and a Sell signal is

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the first close below the lower channel line.

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Of course, we're going to have profit targets for every symbol, and we're going

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to try to take money off the table as a market moves in our direction.

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But coming in on Monday, if we were to

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close below $101.34, that would give us a Sell signal, and we come in on Tuesday

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morning and liquidate the remainder of our position.

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Now, we do have 15 charts in the database for every symbol.

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We've got seven daily, seven weekly, and one monthly chart.

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In this trading strategy, we're only using two charts, and that's the Daily Right

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Side Chart and the Daily Price Targets Chart.

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And in this particular example for the 3X ETF, we're looking to Sell When we get up

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to 112.50. I would put an order in just below that level.

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Now, as you can see, as the market is

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hitting all time highs, it's also up at the top of our projected trading range.

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There's no guarantee we're going to stop

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at 112.50. So if you just do the math, it's easy enough to look at the difference

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between the lines as you see them on the screen right now

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and just add another segment above, and that takes us up to 118.75.

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Now, my strategy strategy has always been to Sell half a position at the first price

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target and then Sell half of the remainder position at the next price target.

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Coming into Monday's trading action, you

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can see for the triples for the Nasdaq 100, we're nowhere near the lower channel

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line, so not concerned about seeing a Sell signal on Monday.

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For the triple Q's, once again, we're up

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at the top of the projected trading range up there at 56.25.

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If we start trading above that level, and the next mathematical target right now is

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59.38, once we start trading above the top of the projected trading range for a

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couple of days, we will recalculate a new playing field with higher projections.

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But right now, we are just coming up to the top of the projected trading range.

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Now, all of these ETFs that I'm showing are very liquid.

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For this particular example, the triple

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Q's for the Nasdaq 100 traded over 92 million shares on Friday.

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Now, when we look into the different

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sectors, it's up to you what you're interested in.

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I'm mostly interested in resource stocks.

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Some people are interested in biotechs or financials, etc.

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And so right now, the bear ETF for the energy sector is currently on a Buy

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signal, making a new high for this move on Thursday, coming back a little on Friday.

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We hit our next price target of 31.25 on Thursday.

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So congratulations. You got to lock in some profits.

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Our next profit target is 32.81. Then

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looking at the bear ETF for the gold sector.

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For DUST, Dust.

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We are hitting a new high on Friday.

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Our next price target is 13.28. As you can

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see, we've been short the gold miners since the start of the year.

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Now, another area of the market you might find interesting is the small caps, and

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we've been bearish on the small caps all through the start of 2024.

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Now, we dipped into the channel on Friday,

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so there's a mathematical possibility of a Sell signal for the bear ETF on with a

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close below 21.93. We were trying to get to $25.

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That was our next profit target.

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So far, we have not been able to do that.

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So this trade could end without taking any profits.

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Looking at the bull ETF for the small caps, and again, this is fairly liquid.

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Over 29 million shares traded on Friday.

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On Monday, we're looking for a close above 35.70 to give us a new daily Buy signal.

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Now, this is all emotional free trading.

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I'm going into Monday not caring at all which way the market goes this week.

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If it's going to go up, that's great.

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If it's going to go down, it doesn't really matter.

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I'm going to be able to have the

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opportunity to make money no matter which way the market goes.

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Next up, let's take a look at the Canadian 2X ETFs.

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If you're not a Canadian investor, if you're not involved in Canadian market, I

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would suggest you just watch to the end of the video because you may learn a couple

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of more things here that I have not mentioned already.

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The Canadian market is a little different than US market right now.

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We are currently short the Canadian market or long the bear ETF.

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And so coming into Monday's trading

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action, the bear ETF actually dipped into the channel on Friday.

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And so on Monday, we're looking for a

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close below $6.40 to kick us out of the bear ETF.

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Now, you'd think that we'd automatically go into the bull ETF if that were to

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happen, but transitions don't always happen on the same day.

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So it is possible that we get a

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Sell signal in the bear, but not get a Buy signal in the bull on the same day.

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And sometimes those transitions don't happen at all.

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We could get a Sell signal in the bear on Monday, have the market pull back on

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Tuesday, and still not get a Buy signal in the bull.

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And in fact, if the market would continue

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to move lower on Tuesday and Wednesday, we might actually have to go back into the

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bear ETF and not spend any time at all in the bull ETF.

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So speaking of the bull ETF, we're looking for a close on Monday above $20.15.

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Now, the bull ETF was up 1.42% on Friday, so that should be twice as much as the

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unhedged ETF, and that was up 0.76%. So the XIU, which is the most

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actively traded and actively followed ETF in Canada, was up 0.76 %.

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So a little less than what the 2X ETF was, but pretty close.

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And so you're almost getting twice the bang for your buck using the 2X ETF.

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Now, in Canada, the selection is not as big as it is in the US.

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Now, for Canadian investors looking for

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Canadian-only options, I would suggest these five pairs.

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Now, there are other pairs available.

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In fact, natural gas is one of the most popular, but it is extremely volatile.

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And if you want to play with this one,

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well, you need to be a very seasoned a trader to do so.

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Looking at the bear ETF for natural gas on Friday, it was actually down nearly 14% on

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the day, and that's not unusual for this particular ETF.

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So that's extreme volatility.

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At the other end, you've got very thinly traded ETFs such as the financials.

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Now, financials by themselves are not the

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most volatile sector of the market to begin with.

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This area of the market doesn't attract a lot of traders.

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In fact, for this particular ETF, the bull

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ETF for the financial sector, it was less than 10,000 shares traded on Friday.

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Just be aware of that.

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I'm looking at the major pairs.

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For the TSX, for the S&P 500, if we look at this chart, you can see we

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dipped down and spent all day trading below the lower channel line.

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But if we go back to Wednesday's chart,

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you can see we were looking for a close below $17.89. We actually closed at

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$17.90, so right one penny above the channel line.

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So that did not generate a Sell signal.

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Our first profit target for the S&P 500 2X

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ETF is 18.75, then 19.53. Looking at the Nasdaq 100, again, making new highs here.

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And in this case, we're trading above our projected trading range.

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And of course, over the next couple of

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days, if we stay up here, we're going to calculate a new playing field.

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But right now, if you just do the math, the next price target is 1797.

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And as a backup, you can always go to the weekly chart.

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I said we only use two charts, but

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sometimes you might want to go to the weekly chart and see that the next major

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price target is 18.75. Now, looking at the energy sector, we are

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long the bear ETF at the moment, looking for a move up to 6.25.

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For gold stocks, again, we are long the bear ETF.

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Our next profit target is 6.64. We've already hit a couple of profit

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targets during the month of January and looking to continue to move higher.

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Is this a realistic target?

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Well, yeah, we were up at that level back

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in November, so it is certainly a realistic target to the upside.

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Okay, let me wrap up this presentation by

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giving you one more very interesting tidbit, and that is the fact that you can

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do this trading strategy in a retirement account.

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It's not normal for you to be able to

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short a stock or short the market in a retirement a retirement account, but you

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can go long a bear ETF in a retirement account.

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That means you can make money when the market is falling and everybody else is

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crying about the fact their retirement investments are going down.

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Again, this is a trading strategy, not an investing strategy.

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You should be diversified.

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It's fun to start out with just one ETF,

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but you probably want to start off with several pairs.

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I recommend five, some indexes, sectors.

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As I mentioned, I have an interest in the resource sector.

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Some people have a strong interest in biotechs and semiconductors and other

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areas of the market that we didn't talk about here, and that is certainly doable.

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There's lots of opportunities, especially in the US market, to be diversified.

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Okay, thank you very much for your time and attention.

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Next time, you'll hear my voice is on Tuesday morning.

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And of course, if you have any questions

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at all, please drop me an email, and I'll

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be glad to reply as quickly as possible.

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