I thought we were going to do it, close the Value Line down 4% knocking us out of our latest entry on the Zweig-Davis 4% Value Line trade. For background on this trading system you can read the blog entry: Zweig 4% trading model - Thanks to Ned Davis. It is a very simple weekly trading system.
We are unable to trade the Value Line directly so we have been using the Rydex 2x Russell 2K EFT (RRY) as our proxy. I am sure there are better proxies out there, but that is what I chose. Here is an update of where we are:
As I said: I thought midweek that Friday's close would shake us out, but we ended down just 3.6% for the week on the Value Line, hence we are still in the trade and positive since our 5/29 entry. That completes 3 weeks on the current trade which entered RRY at 22.00 on 5/29 and closed this Friday (6/19/09) at 23.03, still up $1.03.
So in total we are up 45.88% in this system, during this time the SPX is up about 24.5%, so we are almost 2x over the SPX from 3/13 to now. From the SPX low in March to now the SPX is up about 42%, so we are a little a head of a perfect entry on the SPX.
Happy Trading
-RLT
