Sunday, January 1, 2012

SPX Daily Chart Showing Keybot the Quant 2011 Results

This chart displays the majority of algorithm signals for 2011. The SPX Benchmark Index was flat as a pancake starting at 1258 and ending at 1258 for 0% return. The Keybot the Quant algorithm program returned 33% handlily beating the SPX. The actual ETF trading as per the algorithm signals resulted in a 37% return for 2011.

Keybot started 2011 by riding the bullishness in January and February. Markets were choppy from March into summer time. Many of the large robots and algorithms were unplugged since the trading was low volume and low volatility which is difficult for the majority of programs to handle. During this period, major money managers lost millions in customer accounts since as soon as the markets started to commit to a certain direction, the funds piled in, only to have their heads handed to them. Then the same in reverse, again and again; choppy difficult trading period during spring-summer.

The highlight of the year was Keybot going short 7/11/11 and covering the trade on 8/23/11, riding the August waterfall crash from 1324 to 1146, 178 handles, a huge gain. Then, choppy markets were back for August-September, again picking the money managers' pockets in sideways action. Keybot then rode the October rally from 10/6/11 to 10/20/11, 1146 to 1206, a 60 handle gain. The algo also capitalized on the November tumble going short at 11/15/11 and covering 11/28/11, from 1247 to 1194, a 53 handle gain. Then the rally from there, 1194 back up to 1234, a 40 handle gain.

Keybot is not designed to call exact tops and bottoms; it is programmed to take the smoothest and most profitable path thru any trading year constantly choosing either the short side or long side position only. Keybot begins 2012 on the long side, bullish, from SPX 1258 (actually SPX 1240 but the algo had to be zeroed for 2012 data). Extreme caution is recommended moving forward; many unknowns are ahead for 2012.

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