The Triple X S&P 500 Strategy

The S&P 500: When to buy? here’s how…

The S&P 500 Index is a household name among investors for good reason. Here are three major advantages of adding this index to your portfolio:

  1. Instant diversification: When you buy a single stock, its performance is largely concentrated in the companies specific fortunes. The S&P 500, however, offers instant diversification by exposing you to 500 of the largest publicly traded U.S. companies from a cross section of industries. This diversification minimizes your risk from the underperformance of any single company, while simultaneously offering a snapshot of the overall U.S. stock market.

  2. Long-term growth potential: Over long periods of history, the S&P 500 has shown that it is remarkably fungible and can offer compelling growth even when accounting for significant market fluctuations. While past performance certainly doesn't guarantee future results, it makes a strong case for the index's ability to generate wealth over long time horizons for investors who stay invested through market cycles.

For experienced investors looking to leverage returns (and willing to accept additional risk), the Direxion Daily S&P 500 Bull 3X Shares (symbol SPXL) may be an interesting option. This leveraged ETF is designed to deliver triple the daily return of the S&P 500.

The Triple X S&P 500 Strategy applies the following technical indicators to the Direxion Daily S&P 500 Bull 3X Shares (symbol SPXL) to increase long term return while minimizing down-market risk:

  • When to buy: 2-month average daily trading volume jumps significantly above it historical average.

  • When to sell: 5-day price momentum indicator falls below its lower band.

The Triple X S&P 500 Strategy effectively times market entry and exits using key indicators. A surge in 2-month trading volume signals increased participation and liquidity, indicating a buy opportunity. Conversely, a 5-day price momentum crossing below its lower band suggests growing selling pressure, signaling an impending sell, allowing investors to capitalize on short-term price movements.

A Word About the Direxion Daily S&P 500 Bull 3X Shares (symbol SPXL)

The Direxion Daily S&P 500® Bull 3X Shares seek daily investment results, before fees and expenses, of 300% of the performance of the S&P 500® Index. There is no guarantee the funds will achieve their stated investment objectives. These leveraged ETFs seek a return that is 300% of the return of their benchmark index for a single day. The funds should not be expected to provide three times or negative three times the return of the benchmark’s cumulative return for periods greater than a day.

Index Information

The S&P 500® Index (SPXT) is designed to be comprised of stocks that are the 500 leading, large-cap U.S. listed issuers. The securities are selected on the basis of market capitalization, financial viability of the company, sector representation, public float, liquidity and price of a company’s shares outstanding. The Index is a float-adjusted, market capitalization-weighted index. One cannot invest directly in an index.