Rich Trend Trader's Blog

February 23, 2011

UNOFFICIAL CASH Signal @ EOD on 2/22/11

Filed under: Trend Timing Model — Rich Trend Trader @ 2:14 am

The S&P400 closed above its upper Bollinger (20,2) limit on 2/11/11 and subsequently the S&P600, S&P400, and S&P500 have closed below its previous 5-Day low.  I have been working on data available back to 1992 to get a firm set of rules for this latest addition to the trend model.  At this point if the trend model does not give a SELL signal prior to at least one of the trend model indices closing below its previous 20-Day low and possibly below its lower Bollinger (20,2) limit then I would be calling for an UNOFFICIAL BUY-ENTRY.  Lets see what the market has in store going forward.  Although today was a big hit for those who are long, look at a chart of the market indices over any given 6-month time-frame and it will be evident that occasionally the market makes big moves down on a single or multiple day period even thought the overall trend may still be up.  I would not short the market until the trend model gives a SELL signal.


February 1, 2011


Filed under: Trend Timing Model — Rich Trend Trader @ 5:05 am

I am still adjusting to the new job, new home, and new town and have been updating the trend model data every couple of days rather than every evening.  Once my new office furniture is installed into my home office I will be able to get back to nightly data updates.  Note that the UNOFFICIAL CASH signal @ EOD on 1/20/11 did not affect the current market signal data from the official trend model.  Until I fully implement this signal into the trend model I will only present it for information only.

The UNOFFICIAL CASH signal @ EOD on 1/20/11 was negated with the market data @ EOD on 1/27/11.  The conditions for a re-entry BUY signal after the CASH signal parameters as indicated on 1/20/11 is when 2 of 3 trend model indices (S&P600, S&P400, and S&P500) close above the previous 5-day high.  The S&P500 closed above its previous 5-day high on 1/26 but the S&P600 and S&P400 did not follow suit until 1/26.

Historical data indicates a fair amount of whip-saws following this type of CASH signal but can reduce large drawdowns prior to a trend model SELL signal.  For instance, the same type of CASH signal was issued on 4/30/10 which was 4 days prior to the large market drop on 5/6/10.  Assuming an EOD trading account this signal would have saved 7.34%, 7.18%, 6.16% and 6.79% on the S&P600, S&P400, S&P500, and NDX100 from 5/3 to 5/6.


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