FAQs Frequently Asked Questions
Dr K Market Direction Model
Can you please help me clarify the Market Directional Model signals?
Q: Can you please help me clarify the Market Directional Model signals? On the 11th in the model report you suggested buying an inverse ETF. Then in the Market Lab Report on the 15th you suggested waiting for a market rally to lay out inverse ETF positions. Which report is accurate?
A: The signal should be acted on when you receive the email from the Market Direction Model service. The model switches on average between 12 to 20 times per year. After the signal is issued, we may email out subsequent reports on how one could add to or subtract from their initial position. For example, as the market rallies, it gets closer to the model's fail-safe which would neutralize the sell signal, thus you would sell your inverse ETF and go to cash. But as it gets closer to this fail-safe, you could initiate (had you not acted on 8/11 when the signal was issued) or add to your position knowing that the fail-safe is just around the corner, so the loss on this new position would be minimal.
A: The signal should be acted on when you receive the email from the Market Direction Model service. The model switches on average between 12 to 20 times per year. After the signal is issued, we may email out subsequent reports on how one could add to or subtract from their initial position. For example, as the market rallies, it gets closer to the model's fail-safe which would neutralize the sell signal, thus you would sell your inverse ETF and go to cash. But as it gets closer to this fail-safe, you could initiate (had you not acted on 8/11 when the signal was issued) or add to your position knowing that the fail-safe is just around the corner, so the loss on this new position would be minimal.
| First published: | 25 Aug 2010 |
| Last updated: | 25 Aug 2010 |