You will receive an email every weekday at your chosen time and time zone (default: 4:05 PM America/New York, i.e., right after the NYSE closes) with the current status and buy/sell recommendation of the strategy.
If the signal changes, a reminder to buy or sell will also be sent at your selected reminder time and time zone (default: 9 AM Europe/Berlin).
If you have already subscribed, you can change your settings at any time by resubscribing with the same email address.
Understanding Leveraged ETFs and the 200-Day SMA Strategy
Leveraged ETFs are exchange-traded funds designed to amplify the daily returns of an underlying index, often by two or three times. For example, SPXL aims to deliver three times the daily performance of the S&P 500 index. While this leverage can lead to higher gains during uptrends, it also increases risk and potential losses during downturns. Leveraged ETFs are typically best suited for short- to medium-term trading rather than long-term investing, due to the effects of daily compounding and volatility decay.
One popular approach to managing risk with leveraged ETFs is to use a moving average strategy. The 200-day Simple Moving Average (SMA) is a widely followed technical indicator that smooths out price data by averaging the closing prices over the last 200 days. When the price of an index like SPY is above its 200-day SMA, it is often interpreted as a sign of a long-term uptrend. Conversely, when the price falls below the 200-day SMA, it may signal a downtrend or increased risk.
The 200-SMA strategy involves holding leveraged ETFs like SPXL only when the underlying index (SPY) is trading above its 200-day SMA. When SPY drops below this threshold, the strategy suggests moving to cash or a less risky asset. This approach aims to capture the bulk of long-term uptrends while avoiding major drawdowns during bear markets.
If you are interested in exploring historical performance of leveraged ETFs with and without the 200-SMA strategy, you can use the free tool at
leveraged-etfs.com/tools/statistical-analysis.
This resource allows you to compare different strategies and see how the 200-SMA rule would have affected returns and drawdowns in the past.
Note: Leveraged ETFs are complex financial instruments and may not be suitable for all investors. The risk of loss can be significant, especially in volatile markets. It is important to conduct thorough research and consider your risk tolerance before trading leveraged ETFs. This page is for informational purposes only and does not constitute financial advice and does not guarantee any specific investment outcome or even correctness of the information provided.