Rich Trend Trader's Blog

March 26, 2012

Attempt to Whipsaw the Latest CASH (50% Long Positions put into Cash) Signal – 3/26/2011

Filed under: Trend Timing Model — Rich Trend Trader @ 8:22 pm

Today’s market action attempted to put in another failure of the CASH (50% Long Positions put into Cash) signal.  The mid caps (MID) were the only holdout in completing the required rules for the failure and held below their previous 5-day high.  Again, it is not surprising given the historical examples of this type of signal for the market to either rally right up to near failure or put in another whipsaw.

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March 23, 2012

CASH (50% Long Positions put into Cash) Signal – Trend Model BUY Signal Still in Effect 3/22/2012

Filed under: Trend Timing Model — Rich Trend Trader @ 6:46 am

A 50% CASH signal has been issued at the end of day on 3/22/12.  The small caps (RUT and SML) and mid caps (MID) closed below their respective 5-day low after at least one of the indices closed above its upper Bollinger (20,2) band on 3/19/12.  Lets see if this is another whipsaw signal or the market continues to sell-off.  Some type of move up prior to any move down is possible given the slight oversold condition on the 30-minute SPX chart.  However, the daily indicators are not oversold as was the case on the day of the last CASH signal which coincided with the small caps closing below its previous 20-day low.

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March 13, 2012

CASH Signal Failure – 50% Portfolio BUY Re-Entry Signal EOD 3/13/12

Filed under: Trend Timing Model — Rich Trend Trader @ 8:08 pm

As suspected, the close below the previous 20-day low on the small cap indices on 3/6/12 marked the local low and now the conditions have been met for a CASH signal failure.  This 20-day low point for the small caps have many times in historical data been the indicator of a local low (or near a local low) for the markets during a trend model BUY signal.  Still, I am working with historical data to firm up a buy signal of some type at these local lows.

Note that MID (S&P400) and SPX (S&P500) have closed above their respective upper Bollinger band again so will be looking at another possibility of a CASH signal going forward.  This is fairly typical behavior for CASH signals as mentioned in an earlier post in that there can be a number of whipsaws before a signal hits a homerun.  However, it has been proven that over the long run an improved signal performance is achieved with the CASH signal as defined

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March 7, 2012

CASH (50% Long Positions put into Cash) Signal – Trend Model BUY Signal Still in Effect 3/6/2012

Filed under: Trend Timing Model — Rich Trend Trader @ 1:35 pm

All trend model indices considered for the CASH signal (RUT, SML, MID, SPX, COMPQ) closed below their respective 5-day low on 3/6/12 after at least one of these indices closed above its upper Bollinger (20,2) band on 2/3/12.  This is the 50% CASH signal that was previously explained.  The CASH signal failure has been previously defined but the local low BUY Re-Entry signal has not been fully explored and therefore would not front run the signal at this point.

The BUY Re-Entry signal for the condition in which the trend model main signal is a BUY and a 50% CASH signal has not been fully developed with respect to backtested rules.  There are multiple instances in which either the RUT or SML close below its previous 20-day low during model condition ‘BUY with a 50% CASH signal’ mark a local low.  A much more reliable condition would be for two or more CASH signal indices (RUT, SML, MID, SPX, COMPQ) to close below its previous 20-Day low with its respective 5-Day RSI less than 20.  Additional rules development is being explored however, note that the trend model performance posted in the Signal Dates and Index Returns do not contain this CASH signal concept.

DISCLAIMER: https://richtrendtrader.wordpress.com/disclaimer-on-information-presented-in-this-blog

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