The Owl Bundle User Group (OBUG) had an engaging fourth quarter of 2024, scanning the markets for the week ahead, strategy backtesting, and collaborative learning. Using tools like EdgeRater and the ThinkorSwim backtester, we worked to gain a deeper understanding of Dr. Ken Long’s methodologies by systematically exploring their strengths, edges, and limitations. With 93 weekly recorded OBUG sessions to date plus 10 dedicated tutorials on backtesting with EdgeRater, we continued to refine our trading expertise through data-driven approaches. This quarterly summary highlights our market analysis using Dr. Long's 30-period Regression Line Slope Z-scores, and the insights gained from our backtest studies.
Meeting 84 - October 13, 2024
Market Highlights:
Outflows: Bonds (TLT, IEF, SHY), real estate (VNQ), Consumer Staples (XLP), and Utilities (XLU).
Inflows: Energy (XLE), commodities (USO), small caps (IWM), mid-caps (IJH), and safe-haven metals (GLD, SLV).
Backtesting Focus:
Reviewed RL Strategies (Tests 7 & 8) with and without 25% trailing stops on Dow30 symbols, highlighting differences in average hold days and profitability.
Analyzed the Critical States Template, showing that symbol-specific applications (e.g., Godzilla and Fireworks) outperform broader indices like SPY or QQQ.
Meeting 85 - October 20, 2024
Market Highlights:
Outflows: Energy (USO) facing profit-taking, Utilities (XLU), and bonds (SHY, IEF).
Inflows: Mid-caps (IJH), small caps (IWM), gold and silver (GLD, SLV), and defensive sectors like Healthcare (XLV).
Backtesting Focus:
Godzilla strategy: Positive results with Keltner exits; plans for survivorship bias mitigation.
Historical Volatility Crossovers: Early promising results using a 1-month vs. 3-month crossover with a smoothing moving average.
Meeting 86 - October 27, 2024
Market Highlights:
Outflows: Commodities (USO, GLD, SLV) and broad equities (SPY, QQQ, IWM).
Inflows: Treasuries (TLT, IEF) and Consumer Staples (XLP) indicating cautious positioning.
Backtesting Focus:
Conducted correlation analysis of Swing Systems to identify low-correlation strategies for improved portfolio diversification.
Tutorial on generating correlation matrices from EdgeRater backtest data to aid decision-making.
Meeting 87 - November 3, 2024
Market Highlights:
Declining RiskZ and broad-based momentum loss across SPY and major sectors like energy, materials, and technology.
Early signs of rotation into bonds and defensive assets.
Backtesting Focus:
RiskZ Strategy: Optimal results using -1 sigma entries and 0 sigma exits, capturing recoveries from oversold conditions.
Batch testing highlighted key parameter optimizations for increased profitability.
Meeting 88 - November 10, 2024
Market Highlights:
Post-election optimism with strong momentum in XLF, XLE, XME, and XLK.
Small caps (IWM) showing potential for growth opportunities.
Backtesting Focus:
Forward Testing: 5DD and CH+DOJI systems achieved a 63% win rate with a profitability factor of 1.6:1.
Ranked top 10 of 26 strategies by Profit/Max DD, FE25, and Net Profit. Top performers included RLxSlope, HV22xHV63, and SSC Harshwinter.
Meeting 89 - November 17, 2024
Market Highlights:
Energy (XLE) and Consumer Discretionary (XLY) lead gains, while small caps (IWM) roll over.
Momentum weakening across key sectors, signaling potential consolidation.
Backtesting Focus:
Correlation analysis revealed three portfolios of non-correlated strategies for diversified trading.
Monte Carlo simulations demonstrated the importance of understanding performance variability due to market conditions.
Meeting 90 - November 24, 2024
Market Highlights:
Strength in small caps (IWM), energy (XLE), and discretionary (XLY).
Defensive plays like Utilities (XLU) and Healthcare (XLV) showed stabilization.
Backtesting Focus:
Top 10 strategies were mapped against Ken Long’s 3x3 Market Classification Matrix.
Developed a custom Entry and Exit Template using these strategies for optimal execution.
Meeting 91 - December 2, 2024
Market Highlights:
Positive momentum across multiple timeframes for SPY; Tuesday through Thursday identified as optimal trading days.
Backtesting Focus:
RL10 x SMA30 crossover proved effective across 3-min, 5-min, 10-min, and daily timeframes.
Tutorial focused on customizing EdgeRater templates to streamline strategy development.
Meeting 92 - December 9, 2024
Market Highlights:
Treasuries (TLT, SHY) stabilizing, while small caps (IWM) and energy (XLE) showed renewed momentum.
Backtesting Focus:
Analyzed MPRC + DOJI and RLZM strategies, highlighting the importance of tailored exit rules.
Explored trailing stops and adaptive exit strategies for maximizing profitability.
Meeting 93 - December 16, 2024
Market Highlights:
Broad weakening across sectors, with strength only in commodities (GLD, SLV).
Defensive posture indicated by mixed signals in Treasuries and growth-oriented large caps.
Backtesting Focus:
Compared SMA30 x RL10 and Dragon-based exits across intraday and daily timeframes.
Plans for future studies on adaptive exits using Z3 Pinch and ATR indicators.
Join OBUG Today!
The Owl Bundle User Group offers a weekly forum for traders to learn, collaborate, and trade with greater knowledge and confidence. With 93+ recorded sessions, 10 tutorial workshops, and backtesting tools like EdgeRater, OBUG empowers its members to refine their strategies, deepen their understanding of market edges, and approach trading with greater maturity.