Tuesday, April 16, 2013

04/16/2013 premarket: Don't Get Fancy!

Just a short timing note.

My full model has an experimental hedged version, which reflected a market with an 80% long bias yesterday morning.

After the selloff that version of the model now reflects a 90% long bias.

An ideal hedged version, however, would still be 100% long because it only trades once every 1-2 weeks.

Please keep in mind that this version of the model is still in testing and I do not plan to list those trades whenever they may occur.  The public model is long-only.  Also, since the holding period on my model is longer than 1 quarter, it is not designed to navigate around short term corrections.  What the model DOES indicate, however, is that there is no sign yet of a market top.

In June-July 2007 there was a violent selloff that quickly reversed back to an all-time high.  Most traditional market timers would have lost money in both directions.  Don’t try to get fancy here unless you have a VERY sophisticated model.


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