iQ 2x ETF Market Timing Model

A SMART WAY TO OWN LEVERAGED ETFs!

The iQUANT.pro 2x ETF Market Timing Model seeks to exploit the robust capital appreciation potential of leveraged Exchange Traded Funds (ETFs) while minimizing volatility via the use of sophisticated and time-tested technical indicators on a monthly basis.

Please understand that leveraged funds are not generally considered long-term investment options. In fact, most investors limit their exposure to a leveraged fund in an attempt to capitalize on short-term runs of an underlying index.


How Does the Model Work?

Each leveraged index ETF is represented by its own unique Entry and Exit technical indicator and represents 25% of the Model’s allocation.

If a technical indicator provides a “buy” signal, the ETF is held for a month and re-evaluated the first trading day of the following month.  If a technical indicator provides a “sell” signal, the 25% of the portfolio normally represented by the ETF will move to cash, money market, or Treasury Bill (we use symbol “BIL”) and the ETF will be re-evaluated the first trading day of the following month.

Here are the technical indicators utilized for each leveraged index ETF:

  • ProShares Ultra S&P 500 (SSO)

    • Entry: 10- versus 25-day price (simple moving average)

    • Exit: 25-day McGinley Dynamic Indicator

  • ProShares Ultra QQQ Trust (QLD)

    • Entry: Price versus 2-month high

    • Exit: 3-Day Money Flow Index is above 75

  • ProShares Ultra Russell 2000 (UWM)

    • Entry: 14-day Stochastic Oscillator

    • Exit: Price versus 500 day simple moving average

  • ProShares Ultra MidCap 400 (MVV)

    • Entry: 14-day Stochastic Oscillator

    • Exit: Fast 14-day Stochastic Oscillator | slow 14-day stochastic oscillator

Potential Benefits

The iQ 2x ETF Market Timing Model may provide the following benefits:

  • Potential for Enhanced Returns: Leveraged ETF market timing strategies may aim to magnify the returns of the underlying index or asset class, potentially leading to higher gains during favorable market conditions.

  • Flexibility and Agility: Market timing strategies using leveraged ETFs can offer the flexibility to adjust exposure quickly in response to changing market trends and economic conditions.

  • Diversification: By exposing investors to a variety of style boxes and indices through leveraged ETF market timing strategies, advisors can diversify their portfolios and possibly take advantage of a variety of market opportunities.

ETF market timing strategies involve frequent buying and selling of ETFs to profit from short-term price movements. Despite its appeal, market timing carries risks, significant trading costs, and tax implications. Successful market timing is challenging, and the strategies may not deliver desired returns. Leveraged ETFs seek amplified daily returns based on an underlying index or asset. However, they are not suitable for all investors due to inherent risks. Over longer periods, leveraged ETFs' performance may deviate from daily objectives.