MAY Performance in Brief
The Weekly Trend performance continues to move higher. We changed our return calculations to a simple return compared to annualized returns for the Monthly, Year-to-date, and 1-Year results. Using the annualized returns distorted the results. However, profits are still far exceeding expectations.
The Daily Trend program lost a good deal of its gains, but is still higher for the year. Other markets were mixed in May. High-Risk and Timing were good, both Futures programs mixed.
In-Person Appearances
Perry is planning a 3-day seminar with Kevin Davey on September 24-26th in Chicago. They will discuss their best strategies. Anyone interested in further information can contact Perry at kaufmansignalsdaily@gmail.com. More to come.
Kaufman’sMost Popular Books (available on Amazon)
Trading Systems and Methods, 6th Edition. The complete guide to trading systems, with more than 250 programs and spreadsheets. The most important book for a system developer.
Kaufman Constructs Trading Systems. A step-by-step manual on how to develop, test, and trade an algorithmic system.
Learn To Trade. Written for both serious beginners and practiced traders, this book includes chart formations, trends, indicators, trading rules, risk, and portfolio management. You can find it in color on Amazon.
You can also find these books on our website, www.kaufmansignals.com.
Blogs and Recent Publications
Find Mr. Kaufman’s other recent publications and seminars at the end of this report. We post new interviews, seminars, and reference new articles by Mr. Kaufman each month.
Major Equity ETFs
What is going on? The market jumps each time the administration says that the Gulf of Hormuz might open, and then it doesn’t. AI looked as though it has topped out, but it hasn’t. While Nasdaq (QQQ) is leading the pack, the small caps (IWM) are doing fine. Even the though of higher interest rates doesn’t seem to both investors. There is growing concernt that we’re near a top, but it’s hard to tell.
A Standing Note on Short Sales
Note that the “All Signals” reports show short sales in stocks and ETFs, even though short positions are not executed in the equity portfolios. Our work over the years shows that downturns in the stock market are most often short-lived and it is difficult to capture with a longer-term trend. The upwards bias also works against shorter-term systems unless using futures, which allows leverage. Our decision has been to take only long positions in equities and control the risk by exiting many of the portfolios when there is extreme volatility and/or an indication of a severe downturn.
PORTFOLIO METHODOLOGY IN BRIEF
Both equity and futures programs use the same basic portfolio technology. They all exploit the persistence of performance, that is, they seek those markets with good long-term and short-term returns on the specific system, rank them, then choose the best, subject to liquidity, an existing current signal, with limitations on how many can be chosen from each sector. If there are not enough stocks or futures markets that satisfy all the conditions, then the portfolio holds fewer assets. In general, these portfolios are high beta, showing higher returns and higher risk, but have had a history of consistently outperforming the broad market index in all traditional measures.
PERFORMANCE BY GROUP
NOTE that the charts show below represent performance “tracking,” that is, the oldest results since are simulated but the returns from 2013 are the systematic daily performance added day by day. Any changes to the strategies do not affect the past performance, unless noted. The system assumes 100% investment and stocks are executed on the open, futures on the close of the trading day following the signals. From time to time we make logic changes to the strategies and show how the new model performs.
Groups DE1 and WE1: Daily and Weekly Trend Program for Stocks, including Income Focus, DowHedge, Sector Rotation, and the New High-Risk Portfolio
The Trend program seeks long-term directional changes in markets and the portfolios choose stocks that have realized profitable performance over many years combined with good short-term returns. It will hold fewer stocks when they do not meet our condition and exit the entire portfolio when there is extreme risk or a significant downturn.
Equity Trend
Yes, the Weekly Trend program is doing great, but the picture is based on compounding. When it declines, it will also come off fast. In the meanwhile, I have changed the performance to simple returns for the monthly, year-to-date, and 1-year values to be more realistic. However, this month the Weekly program returned 56%. In my own portfolio I returned 30%. I live with it.
Meanwhile the Daily Trend program lost in May, jumping back and forth from AI to whatever.
Income Focus and Sector Rotation
The Income Focus program lost a percent in May but is still higher for the year. It seems remarkable given that rates may rise while this program favors lower rates.
Weekly Sector Rotation
A loss of more than 2% in May still leaves this strategy higher by almost 8%. I watch it daily and it seems to be serving as a hedge against the trend program. It likes Utilities!
DowHedge Programs
No complaints about the DowHedge Program in May. The Daily Program was up by 6% and the Weekly higher by 9%. Both are ahead by 19% for the year.
High-Risk Portfolios
It does seem to flop around, but in May the 5-Stock program was up by 24% with a year-to-date up 50%. The 10-stock program was up 17%, netting 33% for 2026. Yes, it may be difficult to follow, but that’s why it’s called “high-risk!”
Group DE2: Divergence Program for Stocks
The Divergence program looks for patterns where price and momentum diverge, then takes a position in anticipation of the pattern resolving itself in a predictable direction, often the way prices had moved before the period of uncertainty.
Another program that did well in May, with the 10-stock up 8% and the 30 stocks up 5.5%. The year-to-date returns are no up by 18% and 14%.
Group DE3: Timing Program for Stocks
The Timing program is a relative-value arbitrage, taking advantage of undervalued stocks relative to its index. It first finds the index that correlates best with a stock, then waits for an oversold indicator within an upwards trend. It exits when the stock price normalizes relative to the index, or the trend turns down. These portfolios are long-only because the upwards bias in stocks and that they are most often used in retirement accounts.
A little bounce in the Timing Program puts these portfolio slightly down for the year. Personally, I thought that the decline in AI stocks and the rally would be good for the system. So far it’s gain about 8% and 5% in May. We’ll see if it continues.
Futures Programs
Groups DF1: Daily Trend Programs for Futures
Futures allow both high leverage and true diversification. The larger portfolios, such as $1million, are diversified into both commodities and world index and interest rate markets, in addition to foreign exchange. Its performance is not expected to track the U.S. stock market and is a hedge in every sense because it is uncorrelated. As the portfolio becomes more diversified its returns are more stable.
The leverage available in futures markets allows us to manage the risk in the portfolio, something not possible to the same degree with stocks. This portfolio targets 14% volatility. Investors interested in lower leverage can simply scale down all positions equally in proportion to their volatility preference. Note that these portfolios do not trade Asian futures, which we believe are more difficult for U.S. investors to execute. The “US 250K” portfolio trades only U.S. futures.
Our little rally seems to have stalled out, with small or mixed results in May. While interest rates are usually the driver for futures trends, this year it hasn’t happened. The spike in silver was too difficult to catch, as was crude. We will just have to wait until the market stabilizes.
Group DF2: Divergence Portfolio for Futures
This program is starting to look normal (except for the drawdown!). Mixed results had the 500K portfolio ahead and the others with modest losses.
Blogs and Recent Publications
Perry’s books are all available on Amazon or through our website, www.kaufmansignals.com.
In person appearances:
- Perry will be giving a special 3-day learning seminar with Kevin Davey in Chicago in September.
- He will also be a key speaker at the IFTA conference in London in October.
May 2026
Perry’s article “What We Can Learn From Drawdowns” was published in Spain,
April 2026
A new article, “The Crack Spread” in Technical Analysis of Stocks & Commodities, for those interested in trading crude and its products.
February 2026 / March 2026
An interview with Tim Slater, one of the movers in technical analysis, written by Barbara Diamond. We don’t give enough credit to those that formed the industry.
December 2025 / January 2026
The January issue of Technical Analysis of Stocks & Commodities has Perry’s latest article, “Smoothing the Data.” He looks at a wide variety of smoothing techniques and finds that the moving average is not the best!
October 2025
An article in Technical Analysis of Stocks & Commodities (the November issue) on “Low-Priced Stocks: A Golden Opportunity or an Unreasonable Risk.” You can take a guess or read the article!
As mentioned in the Close-Up, this was a follow-up on the article published in Seeking Alpha on October 25th, “How To Hedge the U.S. Dollar: Gold, Bitcoin, or Whatever?” This version included some portfolio allocations, which should help.
September 2025
No articles in September, although Perry has committed to being the Keynote Speaker at the Society of Technical Analysts (STA) when it hosts the IFTA conference in October 2026 (not this year!)
August 2025
The September issue of Technical Analysis of Stocks & Commodities has Perry’s article “Using the Elusive Volume Confirmation.” While volume has been an important component of price movement, Perry takes a look at how useful it has been.
July 2025
This month (the August issue) there is an article on “Explaining FX Carry (In Detail).” The Carry program has had years of profits followed by years of losses, yet it is a very important part of institutional trading. This article shows how it is actually done.
Perry has been asked to be the Keynote speaker at the IFTA Conference in London in 2026 (not this year!). Of course he will accept. Plan to be there!
June 2025
Yes, another article! “There is Money To Be Made On The Weekends – But You Need to Know The Market,” appeared in the June issue of Technical Analysis of Stocks & Commodities.
Perry gave a Webinar to “Trading Heads” in Mumbai, India on June 5 at 9:30 AM New York time. Discussed “Not the Usual Diversification.” With any luck, it was taped.
Perry also addressed a Spanish class where they are building algorithmic strategies. Called ROBOTRADER, it in ETSIT-UPM (Escuela Técnica Superior Ingenieros Telecomunicación- Universidad Politécnica Madrid). The presentation is about Diversfication (in English) and available on youtube.
Older Items of Interest
Perry did a studio interview with Jeff Baccaccio (“Rfactory”) in London in March 2025. It is a fine production and a good interview. He has put it on youtube. I hope you enjoy it.
YouTube: https://youtu.be/jmR359jHYBQ?si=IHQ5bVLijGFM19qF
Perry was interviewed on June 27, 2024 by Simon Mansell and Richard Brennan at QuantiveAlpha (Queensland, Australia), a website heavy into technical trading. It appears on their website.
On April 18th, 2023, Perry gave a webinar to the Society of Technical Analysts (London) on how to develop and test a successful trading system. Check their website for more details, https://www.technicalanalysts.com..
Perry’s webinar on risk, given to the U.K. Society of Technical Analysts, can be seen using the following link: https://vimeo.com/708691362/04c8fb70ea
For older articles please scan the websites for Technical Analysis of Stocks & Commodities, Modern Trader, Seeking Alpha, ProActive Advisor Magazine, and Forbes. You will also find recorded presentations given by Mr. Kaufman at BetterSystemTrader.com, TalkingTrading.com, FXCM.com, systemtrade.pl, the website for Alex Gerchik, Michael Covel’s website, TrendFollowing.com, and Talking Trading.com.
You can address any questions to perry@kaufmansignalsdaily.com.
© May 2026, Etna Publishing, LLC. All Rights Reserved.