Trading Strategy: Nasdaq-100 (Medium-Term)
Elliott Wave Technology Brief: Then, Now, & Next
In holding our strategic trading systems' long-term performance histories to task, this brief supplies two charts. The first reviews how our proprietary trading systems had been engaged in the recent past (THEN), and the second chart illustrates the efficiency of these trading strategies along with how they are positioned (NOW), and how they may respond to market conditions in the future (NEXT).
In sum, the strategic position charts shared summarize how our medium-term Level-III strategy is performing in the title market and how it is currently positioned relative to its primary directive of profitably trading Elliott's Minor Degree's of trend:
Without further ado, we present past and current Level-III positions taken in the...
...NASDAQ-100 Daily Bar Chart: THEN (2-19-2010 - 9/8/2010)
THEN (2-19-2010 - 9/8/2010):
Previous Engagement | Medium-Term:
As equity markets finally began moving lower in May of 2010 following extraordinary gains achieved from the 2009 bear market low to the peaks reached in April, our Level-III trading strategy, which is algorithmically coded to capture Elliott waves at the Minor Degree of Trend, turned defensive.
Uncertain as to whether the peak in April was a 3rd or 5th wave terminal at Minor Degree, our systems alerted us to move short ahead of the Flash Crash, which occurred on May 6, 2010.
Each of the star-points (*) noted on the above chart represent potential pivot terminals that could have represented Minor Degree turning points. As such, our medium-term Level-III trading strategy responded accordingly at each of those plausible terminals and sub-terminals.
Although somewhat disappointing in its non-levered net gain of only 2.12% for the eight months spanning February - September of 2010, the result of following a disciplined rules-based strategic approach to engaging the market was prudent and credibly effective.
In the timeframe above, Level-III held the volatile and whipsawing market to task in executing a total of six trades in attempt to fulfill its primary directive.
The net result was four losing trades and three winners, the last of which remains an open position.
...NASDAQ-100 Daily Bar Chart: NOW & NEXT (1/20/2011)
Outcome & Current Engagement | Medium-Term:
As of mid-session on January 20, 2001, the exemplary Level-III long positions established on September 8, 2010 have amassed (Non-Levered) open profits of nearly 23% in four months time. Obviously, those using levered ETF's or futures contracts have amassed far greater returns.
NOW & NEXT:
Despite prospects for an imminent Minor Degree crest near at hand, Level-III shall remain positioned to the long side of the market until such time as our embedded trading criteria alerts us to take profits, and shift positions to a bearish posture.
The five-month bullish stampede from September 2010 through January 2011 has yielded highly respectable gains, and provides us with additional confidence that Level-III is indeed meeting its primary directive of capturing the lion's share of Elliott waves at the Minor Degree of trend.
Going forward, we are fully prepared to endure future periods of uncertainty and whipsaw similar to the six months from April of 2010 through September of 2010. That is just one of the many ancillary benefits of employing strategic trading tactics vs. the best guess/gut feel discretionary approach used by the vast majority of participants.
This brief exemplifies information shared weekly within our NTO-Systems Trader publication.
Until next time,
Trade Better/Invest Smarter