VLA Advances

The VLE has now gained just over 4% from its intraday low on 1/9/08. This does not qualify as a buy signal as it is still over 4% below its 25dema and the 25dema is falling.

One feature of a good intermediate term trading system is its ability to keep you in a trade during volatile periods like we are experiencing now. This reduces transaction costs and emotional costs.

However, if you are a skilled short term trader, one way to boost your portfolio performance is to maintain an intermediate term position while taking the occasional countertrend trade when it presents itself. If the Qs can get past resistance at the 200dema and the November 07 low of 48.65, the 25dema or 50dema would be good exit points for a countertrend bounce.

There are a couple of ways this could be accomplished. One is to use the QLD and QID instead of the QQQQ for intermediate term trades. Then use the QQQQ for countertrend trades. Another approach would be to use another market or ETF for the countertrend trade such as the IWM or XLK. Also, one could use options.

At this time, I will not be addressing short term trading methods but I wanted to make the reader aware that it is not an all or nothing affair. Also, each trader should evaluate the merits of any trading system on his/her own before trading it and the current system being presented is not a trading recommendation. At a later date, I will provide a spreadsheet link with a summary of the systems presented.