Frequently Asked Questions
Dr K Market Direction Model
How do you determine the model's fail-safe?
The fail-safe depends on a variety of factors so we will alert members should the fail-safe get triggered. It normally triggers if the NASDAQ Composite moves above the high of the standby sell signal day. But quantitative easing which began in March 2009 has changed this behavior to some extent. That said, the fail-safe can change depending on market conditions so we dont post it prematurely. In practice, losses are usually limited to within -2% of the NASDAQ Composite, thus this would translate into roughly -4% on a 2-times ETF and -6% on a 3-times ETF.
Published: May 6 2011