A dynamic, risk-aware strategy that toggles between a crash hedge, a levered-equity tilt, and rate-driven risk-off exposure. It aims for safer gains by using momentum signals, volatility/rate cues, and a crash hedge (SPXS) when fear spikes, while favoring momentum-backed 3x bull ETFs in normal markets and a dollar/short-bond tilt in rising-rate periods. It avoids K-1 ETFs and is backtestable from 2013. In short: protect during turmoil, ride winners in calm markets, and adapt to rate moves with a disciplined, rule-based approach.

Plain-language overview of how the strategy operates: - Overall goal: Seek safer, more stable gains by timing risk modes and using hedges, while avoiding tax-form complexities from certain funds. - How it watches the market: It tracks market fear and rate signals using a few key tools, then decides which mode to be in (risk-on, risk-off, or crash hedge). - Crash hedge mode (high fear): If a momentum/volatility signal on a volatility-related fund hits a high level (the rule looks at a 40-day lookback and a threshold around 69 on a momentum measure of VIX-related liquidity), the strategy shifts entirely into a crash hedge by buying SPXS (a fund designed to move up when the S&P 500 falls). - Normal risk-on mode: When fear isn’t elevated, the strategy goes into a growth-tilt portfolio using three or more of 3x bull ETFs (these orbit around tech, semiconductors, financials, and broad market). The specific picks are ranked by recent momentum (a short-term momentum score) and the top three are used. The idea is to ride the strongest recent performers while keeping position size to a simple cash allocation split. - Rate-rise (risk-off) mode: If interest-rate conditions are worsening, the system shifts to a defense that tends to strengthen when the dollar rises and rates fall (or at least when risk-off is favored). It looks at a small set of assets that benefit from a stronger dollar or lower equity exposure (US Dollar bulls, inverse Nasdaq, and short Treasuries) and selects the best based on momentum, allocating to one asset (100%). - Rate-fall (HFEA refined) mode: In falling-rate environments, there is a refined, dual-asset mix (UPRO for equities and TMF for long-term bonds) with a conservative spread (about 55%/45%). This aims to capture equity upside while using long-duration bonds as a ballast. A risk-check (e.g., comparing price drawdown or moving-average signals over a 200-day window) helps determine if the strategy should stay in this mode or switch back to risk-off. - How it chooses weights: In the normal market “risk-on” mode, weights are allocated across the chosen three assets, with a substantial share (roughly 68% of the allocation) distributed among them. The scheme uses momentum sorting to decide which three assets to fund first. - Rebalancing: The plan says rebalance = none, meaning it doesn’t constantly rebalance day-to-day; it changes exposure only when the trigger conditions fire (i.e., a switch between modes or a shift within a mode). - What is avoided: It avoids ETFs that generate K-1 tax forms, favoring standard 1099-issuing funds for cleaner tax reporting. - Tax/structure note: It’s designed to be backtestable and tunable, with references to specific switches (e.g., USDU to UUP, and risk-off switch to BIL) as historical adjustments the author tried for different backtesting periods. - In short: The strategy is a dynamic, regime-aware system that moves between a crash hedge, a leverage-long equity tilt, and a rate-aware risk-off tilt, using momentum and drawdown protections to guide decisions, all with an emphasis on tax-report simplicity and backtestability.

Out-of-sample edge: 27.0% annualized return vs SPY’s 23.7%, with crash hedges during spikes and rate-aware risk-off tilts. Momentum-driven gains in calm markets, cleaner taxes, and transparent, backtestable rules aim for higher, steadier growth.