A daily, short-term momentum and ratio-based trading system that uses a mix of ETFs to go long on defense-oriented assets and to hedge or short during risk-off periods, guided by rapid momentum tests and bottoming checks with volatility signals. Built as a multi-layer decision tree, it seeks to ride short-term trends while protecting against big drawdowns through hedges and inverse positions.

What it does in plain language: - It looks at how prices have moved over the last few days to decide whether to buy, hold, or sell. Think of it as checking the pace of recent price moves rather than trying to guess the long-term direction. - It compares the performance of different ETFs over short windows to see which side looks stronger; if one ETF is rising faster than another over the last few days, the strategy may tilt toward that asset or a related group. - It uses quick checks to see if the market is getting overheated or fearful (for example, using a momentum gauge and a volatility gauge). If things look overheated, it leans toward hedges or short positions; if things look calm or improving, it may add to long bets in defensive areas like utilities, healthcare, or gold. - It includes explicit “risk-off” tests (bottoming tests) that try to determine if prices are likely to reverse after a drop; if those tests don’t confirm a bottom, the model keeps hedges in place or reduces risk. - It trades a mix of broad sector ETFs, gold, and some hedging or inverse funds to hedge volatility and downturns. Some parts of the system also look at the relative strength of a big tech or growth proxy (like QQQ) against overbought conditions, and may rotate toward more stable or lower-volatility picks when momentum signals weaken. - It rebalances daily, which means it recalculates conditions and adjusts positions every trading day rather than waiting for weeks or months. - It uses both long-only and selective short or hedged positions to try to capture gains during upswings while limiting losses during downturns. Some parts of the logic also use targeted short-term RSI (a momentum gauge) to avoid buying when near-term momentum is extreme to the upside. Overall, the system is a disciplined, rule-driven attempt to ride short-term price trends while using hedges to protect against rapid losses. Some tickers used are well-known (e.g., QQQ, SPY, GLD) and others are niche ETFs; the exact list isn’t as important as understanding that the model moves among a diverse mix to balance exposure and risk.

Out-of-sample: ~19.46%/yr return, max drawdown ~6.23%, Sharpe ~1.70, vs SPY ~14.35% return and ~18.76% drawdown, Sharpe ~0.81. Lower beta and Calmar ~3.12 signal stronger, steadier gains with less risk than the S&P 500.