MDM - Directionless markets

Published : January 30 2015 at 14:13 ET

Unfortunately, the markets have been about as tricky as ever as one can see from the volatile, noisy nature of the markets over the last several weeks.

MDM has delivered hundreds of signals over many years. In years prior to QE, it would switch on average between 12 to 20 times a year. QE manipulates markets so they dont correct much when they normally would have corrected substantially more.

During noisy periods such as the current one that started several weeks ago, MDM will switch more frequently because during such periods, the market tends to show enough buying or selling pressure to push MDM into a buy or sell signal, where the market would then normally continue in that direction, but instead, the market reverses course after just a few days. This is referred to as a whipsaw market and is the toughest market to trade. Fortunately, such periods never last.

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