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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