We are starting a new feature this week called the TradeWinds Black Box. I am sure most of you know what black box investing is - a method where you let some algorithm spit out your investing choices which you put you money into in a mechanical fashion. I am not a fan of black box investing, nor am I going to promote my momentum selections for such a system.
On the other hand, lets have some fun and see how the TradeWinds works for identifying stocks and ETFs to invest in. Each week, after the Friday close and momentum updates we will select from our Top 25 List the best stocks to invest in for that week. If our overall market momentum as measured by our slow momentum indicator is up, we will pick the newcomers to the Top 25 Long list that are either green or neutral. If the slow momentum indicator is down, we will select the newcomers to the Short list that are red or neutral. We will buy at the Monday open price and sell at the Friday close price. We will track how we do over several weeks.
I have no idea how this will turn out. I haven't spent any time trying to track this because I feel that successful trading is based on accurately getting the pulse of the market (momentum), then selecting a small universe of equities working in the direction of that momentum, then making a somewhat informed decision of which to invest in based on other heuristics.
The TradeWinds Black Box can be found on our Top 25 page. Check it daily for updates.
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