MDM - A brief comment on yesterday's switch back to buy

Published : July 14 2011 at 5:02 ET
The model very rarely ever switches signals so quickly, but we are in unprecedented times with quantitative easing on the table. The model dipped its toe in to test the waters with the previous buy signal, then when problems worsened in Europe, it detected enough selling pressure to switch back to neutral. It also takes into account its fail-safe which keeps losses to an absolute minimum during such times. With yesterday's Federal Reserve notes showing Bernanke is putting QE3 back on the table, the markets rallied pushing the model back into a buy signal.

2011 has been characterized by many cross currents which has made for a trendless market environment. Such environments are challenging to say the least, and it is natural to feel frustration during such difficult periods. Fortunately, at some point, a new trend always begins.


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