SEPTEMBER Performance in Brief
Very mixed results in September but holding on to most gains for the year. The stock market keeps changing its focus from AI to semiconductors to biotech. The only thing that is trending seems to be interest rates – yields heading higher.
The US dollar is at its highest level this year, but with high volatility, giving up all of its gains at the end of August then reaching new highs at the end of September. Not a good market for trend followers. Gold is doing much the same, hovering a this years lows, a reaction to strength in the dollar.
Holding onto profits and waiting for the U.S. election seem to be the only course of action. History shows that whoever wins, the market rallies. This year will be a good test.
In-Person Appearances
Perry’s last appearance for the year will be on October 10 as a key speaker at the IFTA-STA conference in London.
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
A bit floppy in September. While NASDAQ (QQQ) is near its highs, it varies from one sector to the next. The other three index markets appear to be turning down. Even with the same stocks in SPY, the overwhelming effect of non-technical stocks are overwhelming. That makes it a very fragile market.
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
The Weekly Trend is now stable and we’ve added risk measures that will capture at least part of a major rally, as we saw in the AI stocks. Unfortunately, it takes a new event to add rules to the strategy!
This month we gained a small amount in the 10-stock portfolio and gained quite a bit in the high-risk, now up 89% this year. The income focus and DowHedge posted small losses.
Income Focus and Sector Rotation
Small losses in the Income Focus portfolios even while the Fed raises rates. Both programs are essentially flat for the year, which is a good outcome for a program that only goes short rates.
Weekly Sector Rotation
A setback for Sector Rotation, losing over 6% in September. The current holdings are materials, Financials, and Utilities. Normally as safe portfolio, but difficult in this market. However, the portfolio remains higher by 5%.
DowHedge Programs
Modest losses of about 3% still puts this program near the top of the list, higher by 19% and 23% for the daily and weekly portfolios. The weekly program is more volatile, but has higher long-term returns.
High-Risk Portfolios
Recovering from a sell-off last month, the Equity High-Risk program gained 14% and 6% in the small and medium sized portfolios. The 5-stock is now up by 89% and the 10-stock higher by 56%. Nice returns but very volatile.
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.
Still doing well this year, with the 10-stock gaining 4% while the 30-stock has marginal losses. Still, well ahead for the year, very near the 20% posted by Nasdaq (QQQ).
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.
The Timing Program keeps struggling this year. Buying on pullback doesn’t work when prices keep going down! Modest losses in both portfolios but clinging to gains for the year. A nice bull move would help.
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.
A nice move in the Futures trend program added gains of 3% to nearly 9% to the portfolios. That brings most of them positive except for the U.S. 250K, which is limited in what it can trade.
Group DF2: Divergence Portfolio for Futures
Mixed results but some portfolios moving to new lows. Yes, after all this time we’re thinking replacing this program with something fast and more profitable!
Blogs and Recent Publications
Perry’s books are all available on Amazon or through our website, www.kaufmansignals.com.
In person appearances:
Perry’s last appearance for the year will be on October 10 as a key speaker at the IFTA-STA conference in London.
September 2026
Another article in the October issue of Technical Analysis of Stocks & Commodities, “Is It Broken?” An important question and not easily resolved.
Perry and Kevin Davey finished their 3-Day Seminar with good reviews. There will be a taped version available. Contact Perry if you are interested at kaufmansignalsdaily@gmail.com.
August 2026
A new article in Technical Analysis of Stocks & Commodities, the September issue, “Using Skew and Kurtosis.” Not really as complicated as it sounds, and offer good returns and a different look at the market.
June-July 2026
Given the rallies in Silver and Crude, Perry published “Exiting the Trade: How To Avoid Being The Greater Fool.” Sometimes exiting sooner is the best choice. Read the article in the July issue of Technical Analysis of Stocks & Commodities
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.
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.
© September 2026, Etna Publishing, LLC. All Rights Reserved.