I will forego the IWM pyramiding study mentioned on Friday in lieu of jumping over to examine how DIA responds to the Lazy Man aggregate signal. Most traders probably don’t consider DIA a boutique ETF but it’s comprised of only 30 stocks and big prop shops focus major capital on select components every day using various tactics to accentuate momentum and sway the index. As might be expected, the DIA responds to the Lazy Man signal somewhat better than the IWM, with only half the intraday drawdown seen on IWM (with no stops in effects). And, the equity curve is a bit smoother. I’ll look at a few other ETF candidates that can be effectively traded with the Lazy Man signal later in the week.
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