Published : October 5 2011 at 9:48 ET
Q: The model just switched from a sell to a buy signal. If I were to switch into cash rather than go long and the market took off to the long side, would I ever get another buy signal? I would think that I need to go long here or I may be stuck in cash until the next signal switch.


A: The model would not give a second buy signal, just as it would not give a second sell or a second cash signal. That said, you could try pyramiding into your position by buying a smaller than normal starter position, then add to it as the market proves itself on a price basis.

That way, you participate in at least some profit potential if the signal is true, while losing less if the signal is false.



Q: What is the current failsafe level?


A: The failsafe changes in real-time, depending on the markets, so should the failsafe be triggered, we will immediately notify all members.

Typically, failsafes are kept within 2% on the NASDAQ Composite. But due to high levels of volatility, the current failsafe is further away than it normally would be at about 6% from current levels, thus our advisement to either stay in cash or, as we have advised earlier this year, to pyramid slowly into a position, letting price prove itself before adding to one's position.

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