TQQQ Entry Point Within Sight

Aug. 5, 2024

I have a system I want to write about this week, but there’s been some news lately.

The stock market is crashing hard.

Specifically, Big Tech is crashing hard.

Apple is kind of hanging in there but AMZN just got whacked, NVDA has been falling like a rock, GOOG has been getting pummeled, and TSLA has been a dumpster fire since July 11th.

It turns out that A.I. may be overrated. Who knew?

But if you’re a buy-and-hold investor that doesn’t blindly buy for no reason, then this is an exciting time.

Because TQQQ is nearing a possible buy point.

If you believe in timing the market.

If you don’t believe in timing the market and were a dollar-cost-average advocate, you would’ve blindly bought TQQQ in January 2022 like you always do. DCA lovers always buy on a schedule. Here’s what TQQQ looked like on January 2022:

That DCA scheduled buy would have you in at about $85.

Yikes.

With the stock around $58 as of this writing, that initial investment would be deeply in the red.

And if you continued on your annual DCA path of buying every January, in August 2024, you would have lost money since 2022:

Yikes again.

But if you waited until TQQQ dropped under “fair value”, it’s a totally different story.

Buying below the 800 SMA three times (remember, with DCA we bought three times) would’ve gotten you in at roughly $25, $19, and $35:

All of those entries would be very profitable as of this writing.

And with the recent selloff, TQQQ is finally getting near a buy point.

With current “fair value” around $46, any buys below that point have a high probability of doing well over the long-term.

Keep in mind, there have only been 5 times since 2016 that TQQQ has been under “fair value”.

All of those have been profitable.

We’ll change gears and look at a trading system in our next Newsletter.

Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.