The Sentiment Table Strategy:
- Designed by Thomas H. Kee Jr.
- Managed by Thomas Kee
Objective of the Discipline
Short term gains with long periods of net cash positions.
Description of the Strategy
This strategy looks for overbought or oversold conditions to surface before trades are entered, and when the trades initiated they are contrarian trades, in the opposite direction of the overbought or oversold indicator, undertaken with the understanding that probabilities favor short term market moves in the opposite direction after overbought or oversold indicators surface.
Rules Associated With the Strategy
- Wait for an overbought or oversold indicator to surface.
- If no indicator exists remain in cash
- When an indicator comes initiate a trade in the opposite direction.
- If an oversold indicator comes, buy QLD
- If an overbought indicator comes, buy QID
- Close the trade if oversold turns to overbought
- Close the trade if overbought turns to oversold
- Close the trade if technical indicators suggest we should
- Do not hold the trade for longer than 14 calendar days.
Risk Controls and Assessments
The strategy ONLY initiates a trade AFTER the market has moved aggressively. This mitigates the risk. In addition, we only will hold positions for 2 weeks, 14 calendar days, and no more. This keeps the strategy from holding onto a position for extended durations. There is one exception, and that is when a re-iteration alert comes within a few days of the original overbought or oversold indicator, and if that happened the two week hold duration would start from the re-iterated date.