Education only, not advice. Leveraged and strategy-driven investing can lose most of its value quickly. Figures are historical or backtested and do not predict future results.
How it works
9 Sig applies the 3 Sig (the 3% Signal) signal line to TQQQ:
Signal line = last quarter's TQQQ balance x 1.09 + half of new contributions
Each quarter, sell the surplus above the line into the bond side, or buy the shortfall from it. Use the calculator below with the 9% target.
Extra safeguards
- Buying throttle: a single quarter's buy can use at most 90% of the bond balance.
- Spike Reset: after a quarterly gain of 100% or more, reset to 60% TQQQ and 40% bonds.
- 30 Down rule: after a 30%+ fall from the two-year quarterly high, ignore sell signals for a period so the position can recover.
History
- 30 Down activated in spring 2020 and in 2022. In 2022 the bond buffer ran out by mid-year, and the plan reset in January 2024.
- Kelly reported his own 9 Sig account growing from about $733,000 in January 2018 to about $5.9 million in December 2024, including a gain of about 173% in 2023, with ongoing contributions.
Results and stress tests
| Test | Result |
|---|---|
| BestFolio backtest 2010 to 2026 | CAGR about 39%, max drawdown about -72%, Sharpe about 0.82 |
| Simulated through the dot-com crash | 18 to 20 years to break even |
| Closed-system bootstrap | Median drawdown near -98%; worst 5% near total loss |
The 2010 to 2026 window was one of the best in history for the Nasdaq 100.
Risks
- Not viable as a closed system: it depends on new money in bad years.
- 3x leverage compounds losses; TQQQ fell about 77% in 2022, which needs a 335% gain to recover.
- Sequence risk: starting just before a crash can take decades to recover.
- See Volatility decay and Maximum drawdown.
Signal line calculator
Enter your balances at the end of the quarter. Nothing is sent anywhere; the sum runs in your browser.
Signal line = last quarter's stock balance × (1 + target) + half of this quarter's new money. The 30 Down rule, the 9 Sig buying throttle and the Spike Reset are explained above and are not applied automatically.
See also
- 3 Sig (the 3% Signal) Jason Kelly's 3% Signal explained: quarterly value averaging between a stock fund and bonds, the signal line, the 30 Down rule, backtest results and risks.
- 6 Sig The 6 Sig strategy applies Kelly's signal line to MVV, a 2x leveraged midcap fund, with a 6% quarterly target. Rules, 30 Down reset, results and risks.
- Leveraged ETFs explained How leveraged ETFs like TQQQ and UPRO work, why they reset daily, how volatility decay erodes them, and what their historical drawdowns look like.
- Leveraged strategies compared A side-by-side comparison of six leveraged ETF strategies, 3 Sig, 6 Sig, 9 Sig, TQQQ FTLT, Holy Grail and HFEA, by holdings, signals, results and risk.
Last updated September 30, 2026. Education only, not investment advice.