Tango5 Members Update                               042109

TangoETF Inverse (Long Short) Option Goes Live Tonight 

The Inverse Option on the three portfolios, Aggressive, Moderate, and Conservative goes live tonight. The current trades are the same but you will see a new daily report format which will include the status of the Bull/Bear State signal. At the bottom of the report under Notes is an explanation of the two signals and how they are used together.

I will have a new page on Market Cycles and Signals in a few days which will be very comprehensive and expand greatly on the explanation under Notes, I will notify you when that is complete.

A copy of Notes is here if you wish to read it now:

Notes:

The Endurance portfolio is in the market at all times and does not use the Market Signal or Bull/Bear Signal. 

Buy/Sell Market Signal 

The Buy/Sell Market Signal measures the risk level in the Market. A Sell Signal indicates a lot of risk in the Market and the probability is greater that the Market will go down rather than go up in the near future. A Buy Signal is just the opposite, indicating less risk in the Market and the probability is greater that the Market will go up rather than down in the near future. The Buy/Sell Market Signal cycle occurs on average 2-3 times a year.

Bull/Bear State Signal  

The Bear State Signal identifies a Bear Market environment which is the most opportune time to use the Inverse Option (essentially like shorting the market) to profit from a drop in the market. The Bull State Signal identifies a period which is not the opportune time to use the Inverse Option. The Bull/Bear State is the longer term and occurs on average 1 time every 1.5 years.

 The difference between the Market Buy/Sell Signal and the Bull/Bear State Signal is Intermediate Term and Long Term. How do we use these two signals? When the Bull State is in effect, the sample portfolio will trade based on the Buy/Sell Market Signal: Long/Money Market corresponding with the Buy/Sell Market Signal. When the Bear State is in effect, the sample portfolio will trade based on the Market Signal: Long/Inverse(short) corresponding with the Buy/Sell Market Signal.

How They Work Together 

This sample portfolio will use an Inverse trade of 50% Inverse Fund and 50% Money Market. So, during a Market Sell Signal within a Bear State, the sample portfolio will in effect be 50% short the Market by holding an Inverse Fund.

From time to time, the sample portfolio will use different Inverse Funds. The Inverse Fund will be identified in the Daily Report, for example, "Buy MYY" will appear as the Next Days Action, where the portfolio will buy shares equal to approximately 50% of total portfolio value.

You can read more about Market Timing.

Looking forward to the end of this Bear Market, Don

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