The model's fail-safe was hit, thus the model returns to cash.
As we have stated, quantitative easing out of Europe could push the markets higher in a lackluster fashion as QE1 and QE2 did for US markets from March 2009 - June 2011. But given the volatility of the current environment, the model does not argue with its fail-safes and is back to cash. That said, it will trigger buy or sell signals if it senses opportunity, with its fail-safe always at the ready to keep losses manageable. Pyramiding slowly into your choice of ETF when the model switches to a buy or sell signal is prudent.
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