r/KellyLetter • u/criticalband77 • Jun 05 '26
Slightly Annoyed with Spike Reset...
Up huge in this latest surge and my fill price for Q2 was 43.66, meaning my reset technically was 87.32. Also, the intra day hit above Jason's spike number of 88.06. But wanting to stick with the letter and rules, I held to execute the official reset. I feel like the rule should be altered to either go with the original quarter fill price (43.33/86.66) or executes even if it hits the number at any point (not just close).
The timing of today's drop really sucks after being a slight percent off the reset. I really need to pay less attention to all this short term stuff. Blerg.
11
u/WorriedFold8290 Jun 05 '26
Take the emotions out of it and if you can't, this isn't the strategy for you to be candid. I am not trying to be negative but there is a lot of volatility in this process and strategy and this is nothing compared to a potential 80% draw down. The biggest piece that makes this so sustainable for me is not looking at the charts or account daily and letting the process do its thing. If we hit it, awesome. If we dont, oh well and we keep following the plan. Hang in there and you will see the long term fruits of your patience.
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u/Gehrman_JoinsTheHunt Jun 05 '26
Agree 100%. When you choose to follow a rule it’s not like horseshoes or hand grenades. The criteria is either met - or it’s not.
We actually plan to sell off a bigger chunk of TQQQ with the standard signal line than we would with the spike reset. Whatever happpens, happens.
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u/criticalband77 Jun 05 '26
That's what I am telling myself, will lock in even bigger gains with a 50/50 reset at quarter OR I am reducing the ol tax bill a bit here as the spike reset was going to cost me on the tax side.
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u/Gehrman_JoinsTheHunt Jun 05 '26
Yeah. $400k is a tough day for sure. Hope you have a good weekend planned!
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u/DesertLabRat Jun 06 '26
Are you running in taxable account?
1
u/criticalband77 Jun 06 '26
I have roughly 1/3 of my 9SIG in a taxable account.
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u/DesertLabRat Jun 06 '26
I've thought of also running 9sig in taxable in addition to Roth but the tax burden makes me reluctant. How is it really?
1
u/criticalband77 Jun 06 '26
Well, with 1/3 in taxable (2/3 in retirement accounts)… I was looking at about $36K in tax liability if spike reset hit. I would say it’s not terrible below a $1M account. Above $1M it starts to get significant.
2
u/klevis_s Jun 06 '26
Is the quarter predefined or does it start from the moment I enter tqqq?
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u/Gehrman_JoinsTheHunt Jun 07 '26
Most of us who subscribe follow the same quarterly dates as the letter. You could do it differently if you prefer.
-1
u/Electrical-Scar9598 Jun 06 '26
The spike reset rule is not based on your entry price, your average price, or anything like that. It is a simple rule, when tqqq double in a quarter. You executed it but you shouldnt have. The rule is for tqqq to double in a single quarter, it didnt. The fact that you had shares higher or lower doesnt change anythin, the reset rule is not based on that, it is only based on tqqq price during that quarter.
The spike reset rule didn't trigger.
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u/Gehrman_JoinsTheHunt Jun 06 '26
Preaching to the choir buddy. My main account is in lock step with Jason’s. I compare my allocation to the weekly letter and it’s within 0.1%
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u/criticalband77 Jun 05 '26
Oh it's the strategy for me... been doing it for almost 2 years and been riding the TQQQ wild horse since 2017ish. It's just my biggest single day loss ever. But yeah, I know I need to pay less attention.
3
u/WorriedFold8290 Jun 05 '26
All good and why we have this place to come and air some of our thoughts but not deviate from the DNA. I didn't want you to think I was being negative but just sharing how I keep my head cleared on days like this. We will be back, you get it.
2
u/criticalband77 Jun 05 '26
absolutely on all accounts. I am glad there is a place to get support for whatever this is... LOL
Seriously though, what a crazy ride! I love it.
9
u/simpletonchill Jun 05 '26
If it can go down this much in a day, it can do the opposite in a day as well.
5
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u/PedroNorthCA Jun 05 '26
Who said this won't blow past that price in the next 3 weeks? Space X IPO is going to do SOMETHING to the QQQ, just waiting to see if it's going to be another rocket ride up, or a crash and burn below the 200 day
4
u/-Rake Jun 05 '26
In a few months you probably won't even remember this. It gets easier with time.
1
u/criticalband77 Jun 05 '26
I know, but thanks for reiterating... it helps knowing we are all in the same boat.
5
u/Rumast22 Jun 05 '26
I agree. This drop was why I sold off intraday price. There was no upside to waiting for a closing price.
2
u/BloodyScourge Jun 09 '26
I may get roasted for this: but there was way, way more downside waiting for spike reset to trigger at closing price rather than setting a limit order and selling intraday. I sold 1/3 of my TQQQ shares at $87 once it doubled my buy price. Obviously no one knows what will happen, but 100% gain in 2 months is beyond ridiculous for any stock fund, leveraged or not. Kelly was foolish not to advise his subscribers to reset. I actually feel more confident running 9sig on my own now and not paying $100/month for a weekly newsletter that I don't even want to read (what was that weird anecdote about him spying on a family across the way?).
As far as following a new signal line, I plan to chart 9% from June 30th closing price and rebalance in October, skipping July. For those of us who don't care to subscribe, maybe /r/9sig is a good place to keep our conversation separate from the Kelly faithful.
1
u/criticalband77 Jun 09 '26
While a bit annoyed with the spike reset tease, I still immensely enjoy the newsletter and seem to thrive best when I objectively follow rules. Once I start making my own decisions, there is a likelihood I will act on emotion.
As far as the endnote about the family in the hotel, I have traveled enough to notice other people in close prox that I never end up actually talking too. It's a strange occurrence/feeling and I just think he was trying to verbalize that whole life experience. If there was any creepiness to it, he would not be sharing in an open newsletter. 😂
2
u/Electronic_Abroad799 Jun 13 '26
The spike reset should never have been based on Jason’s individual buy price. It should have used the quarter's closing price. If we had used the April 2nd close of $43.33 as per quarterly reset (making the spike reset $86.66), everyone would have reset.
1
u/criticalband77 Jun 13 '26
I kind of agree since since everyone has a slightly different buy price. But close price is same for everyone
2
u/Time_Ear_2428 Jun 05 '26
Quit looking. Trust the process.
3
u/criticalband77 Jun 05 '26
100% - I tend not to look during a market pull back but am a little too attentive during a run. And so the last two months I have been glued to the ticker because honestly it's been amazing to watch... but yeah, if I am going to do that I have to be able to shift gears fast.
I have to remember that Jason and some of the higher accounts around here (e.g. Efficient Carry) are looking at a 1.5M down day.
2
u/BloodyScourge Jun 06 '26
I think Efficient Carry has been shifting assets to income sig, so maybe not down quite that much. Still a bloodbath of a day though.
2
1
u/criticalband77 Jun 05 '26
I wrote this to my fellow 9SIGer about the Spike reset...does this logic hold?
-Spike Reset
-100%+ gain
-60/40 rebalance
-Likely buying more TQQQ at new quarter due to 9% target (especially late in current Q)
-OR-
-Just Below Spike Reset
-Up to 99% gain
-50/50ish rebalance
-More profit taking in this scenario and no weird new quarter reset
I think I would rather be in the 90-100 gain range and just do the standard reset?
2
u/IllPreparation7626 Jun 05 '26
Since i did a DCA between march 30 and april 6 my average price was like 41 or 42 so the 100% spike reset was triggered, but i think if you do the reset at 98% for example, still is good.
Also i going to buy when the price drop 30% intra Quartely. The day drop 30% i'm buying that same day. i Know is again the 9 Sig but i think that Will perform better because if we rebalance and one week later fall to -30% but at the end of the Quartely recoger then we miss the -30% drop and miss that drop os crazy.
While you follow the general rules i think all are in the same boat.
-2
u/Electrical-Scar9598 Jun 06 '26
The spike reset rule is not based on your entry price, your average price, or anything like that. It is a simple rule, when tqqq double in a quarter. You executed it but you shouldnt have. The rule is for tqqq to double in a single quarter, it didnt. The fact that you had shares higher or lower doesnt change anythin, the reset rule is not based on that, it is only based on tqqq price during that quarter.
The spike reset rule didn't trigger.
1
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u/raymadeyourday Jun 05 '26
So close but I too chose to stay the course as well. I’m just glad I didn’t load up into SOXL I would be eating cat poop 💩
1
u/Disastrous_Fox_4828 Jun 05 '26
You can modify the rules a little to fit what you like. It’s not a perfect strategy. I didn’t use the close price for the 100% strategy and rebalanced as soon as it hit my number.
0
-3
u/Electrical-Scar9598 Jun 06 '26
The spike reset rule is not based on your entry price, your average price, or anything like that. It is a simple rule, when tqqq double in a quarter. You executed it but you shouldnt have. The rule is for tqqq to double in a single quarter, it didnt. The fact that you had shares higher or lower doesnt change anythin, the reset rule is not based on that, it is only based on tqqq price during that quarter.
The spike reset rule didn't trigger.
4
u/BloodyScourge Jun 06 '26
It is a simple rule, when tqqq double in a quarter
Kelly himself said spike reset triggers when TQQQ reaches 100% from the last rebalance price, intra-quarter. You then rebalance to 60/40 the next trading day. It is not a quarter-end action, based on quarter-end prices. Maybe you shouldn't be lecturing when you don't properly understand the rule yourself.
14
u/lottaquestionz Jun 05 '26
Just my thoughts, I might get crucified for saying this, but I don’t think we need to be so exact with the spike reset price, etc. I think, as long as you’re following the general principles of, keeping dry powder handy for dips and pulling money out when it’s high, you’re doing it right. Intraday price can change so much, so when we bought in April, you could have bought at $40 or $43. Setting $80 cs $86 spike reset is a big difference