MLR - How frustrating.... Up more than 10% on the Market Direction Model trade at one point but the trade closes at a small loss.
It is always frustrating to see profits vanish, but that is the nature of 2012, a chop-slop volatile, relatively trendless market. In the model's recent sell signal, the market fell then bounced hard. Here is a recent report we sent out recently: http://www.virtueofselfishinvesting.com/reports/view/mlr-update-on-tvix-uvxy-model-and-i-find-2012-incredibly-frustrating-and-highly-unusual-and-unprecedented-why-is-the-market-moving-higher-while-the-rs-line-of-the-ibd-85-85-index-moving-lower
Indeed, frustration has been running high since 2011 among many investors with respect to general market action as 2011 and 2012 have been relatively trendless, volatile, news driven markets. To have one year of such activity is rare, but to have two years back to back is just about unprecedented. Along similar lines, the trend following wizards as a whole have been underperforming since 2011, nearly two years, which is also unprecedented.
As for those who are considering whether trend following is dead due to quantitative easing (QE), QE has been around in full measure since 2009. MDM has managed to do relatively well up until this year. Such aberrant years are extremely rare and always have come to an end. When most investors and news headlines announce the end of trend following, that is often when new trends begin. This is based on my studies of markets since the early 1900s.
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