When to buy and sell stocks

Find the correlation between the stock returns and the returns of the SPY and QQQ over the past 20 or 40 days

Choose the index market with the higher correlation.

If the correlation is greater than .5 ( modest but correlated) look for a difference of more than 5% in today’s stock price move compared to the selected index.

If the condition is satisfied and the stock is greater than the index, then sell short the stock and buy the index, using equal risk position sizing.

If the stock is below the index, buy the stock and sell short the index, using equal risk position sizing.

Save the difference between the stock return and index return (the gap at the time of entry)

exit the trade when the current gap falls to one half the entry gap.