Strategies: The SIMPLE LONG PLAY

Updated: Feb 20

This is a simple yet powerful pure long strategy based on S&P500 using our CD Micro only. A variety of instruments can be leveraged to trade it: futures, ETF such as SPY incl. options and certificates.

It works quite simple:

  • open long positions if CD Micro is showing less than 40% 2nd day in a row as market opens

  • close the positions if the barometer is about to close above 45% (15 min prior to market close) or above 40% at market opening the following day.

It wont hit the tops and bottoms, however, it led to stable results outperforming the index significantly over time.


Example: December 2021

In this month we only got 1 period to trade. Dec. 1st - 21st was a quite turbulent range market with an unusual number of gaps. From a fairly uncertain Dec. 20th the barometer fell from 72% to 41% at market close on Dec. 21st indicating a massive de-risking of market participants.


We've opened our long positions in the morning of Dec. 22nd since the barometer was still indicating a bullish phase. We remained in the market the following days and sold our positions on Dec. 28th since CD Micro left the bullish space showing 45% prior to market close.


Results:

  • 7 days in trade (incl. 1 weekend)

  • 3.06% profit on the SPY ETF

The overall performance of this strategy didn't outperform the index (which closed gaining 3.19%) in December, however, it was a short and smooth run.




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