Frequently Asked Questions
Q: Since the September move I have been able to keep my drawdown to 10% or so. I have made very little progress since Dec 15 or so. The market has given and taken away. I have been buying many of the leading stocks on pocket pivots off he 10 day. There distance from the 50 day moving average as the market has matured did not allow me to stay with them as they pulled back towards the 50 day. I'm doing lots of trade with little progress of late. I know the model has been difficult as of late. Are you having some of the same problems with many of your trades ? I'm not looking for specifics.
A: Yes, 2011 has been one of the most challenging years so far. A go-nowhere trendless market environment spurred by one-off news events that send the market lower, while QE sends it higher, with no sustainable trend in either direction, is perhaps the most challenging market environment in many years. That said, such periods will end, and more likely sooner than later. How many tsunamis and earthquakes can hit setting off partial reactor meltdowns? Long term fundamentals will win, thus either QE will trend the market higher, or the cancerous backdrop that lies in wait will flare up sending the market lower. The market direction model will continue to measure buying and selling pressure on a continual basis to issue the next change in signal.