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MDM - Chop suey since mid-November + volume issues

One of the few market timing models with merit since the year 2000 makes clear how random and unpredictable these markets have been due to continual governmental intervention in the markets, and is contrary to what the creator of this model has seen in his 40+ year career. Thus his performance has been subpar over the last two years.

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.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2018 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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