MDM & TVIX- Both move to CASH 4/20/12

Published : April 20 2012 at 11:04 ET

Both models have switched to CASH. This means to sell any ETFs and TVIX if you own it.

As discussed, sell signals will be shorter lived given quantitative easing. Further, we are in the throes of another powerful earnings season.

The TVIX buy signal and MDM sell signal were worth a try on Thursday given the distribution day count and both were profitable throughout the day. But today is a new day, and absent negative news out of Europe to push European bourses lower, the short term focus is on powerful earnings here in the US which are looking to help prop the markets higher. Together with QE, it is best to switch to cash for now. This is a breakeven trade on the NASDAQ Composite, slightly up on TNA, slightly down on TYH, slightly down on TVIX.

Unless stated, TVIX signals will sometimes be independent of MDM's signals. MDM looks for intermediate term trends. TVIX focuses on short term trends but may ride an intermediate term trend.

Since TVIX is shorter term focused, another buy signal in TVIX to test the waters could occur as soon as next week. Note, when the market falls, TVIX tends to rise. The correlation is not perfect but for the purposes of the model, it is sufficient.

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