Analysis of a few ETFs and what the Distribution Curve means

Who can tell what the market will do tomorrow?

Stay away from the believe that lines in charts run the underlaying assets or that they can predict the future. The future is unknown. I dont know what the market will do tomorrow. I actually do not care. If it goes up or down or nowhere. But we can put the odds in our favor and that is how you make consistently money in the market. You take little bites here and there. Thats why I love options. They have uncountable combinations and limited risk if you do it right. 

Remember, we want to own the Bank on the Roulette Table.

We dont want to put the chips up on Black or Red. 

What do Distribution Curves tell you? Is it just stupid math? 

Ones you figure it out and can insert the data it shows you very clearly what to expect and what stocks or ETF to buy, to short, to credit Spread Trade. Here are a few examples I generated today and last night.

I compiled 5 years of weekly data from Yahoo Finance. Deriving the standard deviations, statistics of the mean, max and min and skewness. Spread Trades I do on weekly data sets and daily charts as the lowest time frame. The weekly data are good for a month and dont even have to be updated every week since the market stays within its usual parameters. 

Each asset has its own characteristic and attitudes. Like little teenagers with attitudes and good and bad habits.
And you see it in the analysis. GM for example has many more days doing down and not up. IWM is all over the place and runs up with the same speed as down and it wont stop doing it. QQQ has huge tail ends to the upside and tend not to go back that often. 

And I dont care much what a stock does during the day. My earnings will be calculated on Happy Fridays. And then I have alarms set for each trade to give me a warning in order to look at it, and a You-Must-Act-ALERT. Other than that my trading is mostly Excel Spread Sheets.

I am bringing this trading down to a very boring mechanical level. Just numbers and numbers.

ETF Review

This one will not make your money grow fast since the SPY is THE MARKET. It is a little leaning positive and the tails are considerable. Credit Spreads working pretty well here since 95% of the time everything stays within the 1st and 2nd deviation, the tail ends.

This is the DIA, the DJI market index ETF. The PUT side is flatter and hence more appealing for PUT Credit Spreads. Also this one wont make you big money if you bought it.

This is the QQQ. Nice to buy if you want to be a little bit better than the market. Great leaning to the upside with huge tail ends

This one is the IWM ETF which is all over the place. Seems to go up greatly and then also collapses with the same speed. I wouldnt buy it nor doing any spread trades on it.

This is TLT. Nice confinement. 97% it stays WITHIN the 2nd Std Dev. Only 3% of the time in the past 5 years it moved outside. Then consider that the Deviations means both sides! Only 3% in general it went outside BUT this means about 1.67% it hit the upside and 1.33% the down side. If you put your spreads here you run the bank.

Thats one way you analyze an asset. You use data. With the data you can also predict the weekly movements and the expected return in any given week, hence months and so on.