My interest has mostly been in trading QQQQ and other major indexes, hoping to build a small portfolio of contrarian (negatively correlated) indexes. I am interested in two types of strategies:
1. A strategy where some cash is dormant on a trading account for most of the time, yielding a return of less than 4% a year when in "dormant mode". Once in a while (it could be every two or three years, sometimes every six months), when large movements occur on the stock market, I step in as a day trader, doing multiple trades over the course of a couple of days up to one month.
2. A strategy where some cash is used to take advantages of medium-term trends, based on insider information about the economy, that allows me to predict what major indexes are going to do within the next 3 weeks.
What kind of "insider" information can I use, in order to comply with all stock trading regulations?
First, as I said, I am trading indexes, not individual stocks.
While living in the Bay Area, I have found that looking at the volume of traffic (commuters) on highways I-580 and I-880, and particularly the variations in the traffic volume, was a pretty good predictor of what was about to happen in the stock market within the next two to three weeks.
Today, looking at the volume of job ads, and particularly the volume of resumes received on a bi-monthly basis (job ads volume is more subject to variations not related with the state of the economy), I am able to predict what the next job market report will look like, and take advantage of this information. Time permitting, I will create an index measuring "job ad volume" or "job trend", updated monthly or bi-monthly, and publish it here or on DataShaping. This index will provide an insight about where the US economy is heading to, in the short-term.
In the past, I've tried to see if I could get an advantage by looking at all the junk fax and junk email that I received, touting various penny stocks (either by following the recommendations or doing the opposite). I could not find any correlations worth exploiting. Then the junk fax stopped coming in, as if the phone companies had implemented an algorithm to detect and stop junk fax.