The Bear Trader, a trend trading algorithm that primarily trades inverse or short market index ETFs, enabled conservative and aggressive traders to make gains of 13.62% and 40.60% respectively from March 3, 2020, to April 30, 2020. The Bear Trader, which will soon be available to new subscribers, was conceived on March 3, 2020. March 3, 2020, is the date that its parent, the Bull & Bear Tracker (BBT), suspended its text messaged instructions to trade S&P 500 index long and short ETFs.
With the extreme increase in market volatility that began in late February, our concern was that non-professional subscribers might not be able to timely follow the BBT’s explicit signal instructions and thus incur losses. Given this concern, we announced the development of the Bear Trader, a much simpler, scaled-down, and more user-friendly version that would also be powered by the very accurate BBT. See “Why the Bull & Bear Tracker exited the market on March 3rd”.
The decision to suspend the texting of the BBT’s signals to subscribers was timely and correct. The ensuing volatility of the markets was unprecedented. For March of 2020, the BBT had 23 automated signal changes including six signal changes on March 16, 2020. The BBT was able to leverage this volatility for gains ranging from 29.3% for unleveraged to 79.1% for triple leveraged ETFs. However, based on a subscriber survey there is no doubt that a non-professional trader subscriber would have instead incurred significant losses. See “Bull & Bear Tracker Shatters all Monthly records for March 2020”.
In March 2020, the methodology to substantially reduce the portion of the BBT’s automated signals to be sent by the Bear Trader to its subscribers and especially the intraday signals was completed. The Bear Trader’s signals which are generated by the BBT are now being utilized to primarily trade inverse or short index ETFs for the three following reasons:
- Since inception, the BBT had produced an equal number of signals to trade long and short ETFs. This is because the BBT’s algorithm, similar to a market index such as Dow 30 or S&P 500, is in the market 24/7, 365 days a year to trade either long and short market index ETFs. It’s never neutral.
- BBT has an impressive track record for trading inverse ETFs.
- The SCPA (Statistical Crash Probability Analyses) algorithm is projecting the following 100% probabilities:
- A continuation of the decline of the markets to 79% below the 2020 highs and to a final bottom in Q4 2022
- Aggregate trading gains of 300% from trading inverse index ETFs on the way to the final bottom in Q4 2022. See “Market Volatility to Power 17% Monthly Gains through October 2022”.
In addition to the short-the-market alerts, Bear Trader subscribers will receive text messages to trade long index ETFs after subsequent multi-year bottoms have occurred. The BBT’s signal which was sent at 3:45 PM on 3/23/20, precisely caught the market bottom. Subscribers who explicitly followed the instructions to buy and sell the SPXL and the SPY had gains of 43.5% to 14.71% respectively within 48 hours.
To reduce the likelihood of text messages being missed, all of the Bear Trader’s text messages for signal changes will be sent to subscribers prior to the 9:30 AM EST market open and between 3:00 PM and 4:00 PM EST. From the April 9, 2018 inception of the BBT’s signals and through December 26, 2018:
- All 11 of the signals were published prior to the market open or after 3:00 PM EST
- Signals success ratio of 54% is comparable to BBT’s long term signals success ratio
- Cumulative gain from trading the SPXL/SPXS combination was 38%. Cumulative gain from trading the SPY/SH combination was 12.7%. This compared to the S&P 500’s decline of 5.6% for the same eight months.
The Bear Trader’s website, including its instructional content, is currently under development. When compared to the BBT, the Bear Trader will have:
- Fewer signals
- Majority of signals will be to trade inverse or short ETFs
- All signal alerts will be sent 8:30-9:30 AM EST and 3:00 PM-4:00 PM EST
The Bear Trader will be much more user friendly than the Bull & Bear Tracker. A subscriber will know when to check for a signal change.
As soon as the Bear Trader website is completed it will officially inherit the BBT’s track record from March 3, 2020. All of the Bull & Bear Tracker’s signals to trade long and short index ETFs are exclusively available to a qualified registered investment advisor. The tables below contain all of the BBT’s signals for the behalf of the Bear Trader and its performance versus the BBT and the S&P 500 from March 3, 2020, through April 30, 2020.
Based on a new finding from my empirical research its highly recommended to engage a registered investment advisor to manage the Bull & Bear Tracker’s signals instead of attempting to trade the Bear Trader’s signals. The period from now through the end of the fourth quarter of 2022, for savvy investors who utilize a long and short index ETF trading strategy, has the potential to produce once-in-a-lifetime gains. Unleveraged aggregate gains of 500% from trading both long and short index ETFs are 100% probable according to the SCPA algorithm. See “Market Volatility to Power 17% monthly gains through October 2022”.
To be alerted as soon as Bear Trader is available click below.
My prediction is that the S&P 500’s secular bull market which began in March 2009 ended on February 19, 2020. The ninth secular bear since 1802 began on February 20th. The 4-minute video below is about why a market is always in secular bull or bear phase. The difference between secular and cyclical bulls and bears is also explained.
Read my March 31, 2020, article entitled “Embrace the Bear” to learn about:
- investing strategies that are best utilized during bear markets
- investing in the shares of inverse ETFs which go up when the market goes down
- algorithms including the Bull & Bear Tracker and SCPA which are being utilized by investors
A strategy to liquidate all mutual fund holdings and stocks above $5 should be deployed immediately. Time is of the essence. To understand why diversification does not work and why penny and low-priced stocks should be held watch MoneyShow workshop video.