MDM - Chop suey since mid-November + volume issues
Fortunately, trends continue to persist, thus our Market Direction Model has been able to capitalize on these trends. That said, the recent chop suey market seen since mid-November is not good for any model, as it makes markets fairly random and unpredictable, without any clear trend. Thus a neutral stance is best for now in terms of ETF investment. Note, some subscribers spread their risk around by not just buying ETFs based on the model, but also buying or shorting stocks per our recommendations found in three of the other services: Follow The Stock, Pocket Pivot Review, and Short-Sale Set Ups.
Also, as we detail in the FAQs, it is not unusual for the model to have not just one false signal, but a series of false ones. Fortunately, the periods the market trends more than make up for the little losses caused by false signals as the fail-safe kicks in.
In terms of end-of-day volume issues, our thought is that days like today cause confusion when different sources give different volume levels. It doesn't help our cause, but by the time it is sorted out it is not really a problem since the model is not intended as a day-trading tool.
At today's close, eSignal showed less volume, StockCharts more volume, and IBD less volume as compared to yesterday's volume. The end of day volume can fluctuate as the exchanges make their final volume tallies, and various services update their volume tallies at different speeds. In unusual cases, it can take a couple of hours or more for these services to reconcile volume differences. Since the model is designed to catch intermediate term trends in the market, this change should not make much difference to your portfolio. You would just reverse or cancel your positions, depending on the change in signal. Finally, such occurrences where there is a significant difference in volume at the close between various services such as eSignal and IBD should be extremely rare.
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