Indicator has turned red, which shouldn’t come as a surprise.
Last week did not turn the indicator to yellow, but today’s big drop definitely did. Yellow means a) maintain the status quo if you’re just trading SPY, or b) don’t initiate new individual stock trades if adhering to my recent testing. Or just enjoy the fireworks.
My breadth indicator has turned green. I for one will use this as a signal to enter into long-term investments. You can use it for whatever you’d like.
My breadth indicator has turned yellow. This means nothing in itself, just to keep the status quo but be aware that conditions might be improving. Yes I’m aware that the indicator has been red during an upsurge of the market, so “improving” might seem nonsensical. This indicator is a little conservative. I use it to time entries into individual stocks, rather than just trading SPY outright.
Back in June of 2016, I wrote this post about random entries and trailing exits. It turns out (on average) that you can beat buy-and-hold of the S&P 500 by simply buying members of the S&P 100 randomly, as long as you a) have a market-timing filter, and 2) have a trailing stop of 20%. Yes that’s right, just pick them at random! Here are the details of that original ‘system’ (it’s not really a system, more of a curiosity): Continue reading All About the Exits…Revisited