Quick Update

Another signal, another interpretation.

The Seven Sentinels flashed another sell signal today, this one more convincing than the last.

I'm only going to show one chart. It's the one that's the hardest to see without a close-up view.



This time it clearly penetrated the upper bollinger band to the downside.

Two sells in one week.

It may be time to get defensive. Or it could be another false signal. The market has been very difficult to gauge. My friend Poolman is looking for an exit. Good strategy going to the S fund from the I fund. Any bounce will probably be most evident in the S fund.

We are just over two weeks from the end of the month and two new IFTs. OPEX is next Friday, and the run-up to that date will almost certainly be volatile as da boyz take positions.

I think there's time to bail before any sustained selling kicks in. The underlying strength in the market will probably show up again soon. But can it continue its unrelenting rise without any serious selling taking place first?

I'm not saying this up leg is over. I don't really know the answer to that question. I can see both sides of the bull/bear debate. And each trading day changes the picture so my comments at the moment are just that... comments at the moment.

One never wants to marry their position. Not without a nuptial agreement anyway.

 

[airlift]

CH,
I think Poolman is right. The idea that this rally is making an extended top before taking a breather means that we could plummet at any time. Uptrend seems right also. Let's try to read what the market will do in Op-Ex week and try to determine which is the most likely up day to make the exit without much spillover. We can come back later, even if we lose some gains.

Pardon my bad memory, but someone made reference to the posibility thst the 22nd (next Saturday) would mark some sort of beginning to the downside? I may have read this in Uptrend's thread. So, let's try to make a clean and elegant exit. Capital Preservation seems enticing when the market i topping out.

Don't forget to post IYBs additional interpretation or opinions, if any, during the weekend. Tia.

 

[Birchtree]

How long can you keep up your betrayl of the system? Either you have confidence and loyalty or you walk away. A system is a system and not to be questioned because a system is designed to be omnipotent and may no be immediately verified until after the damage has occured. I sometimes wish I had a system that I could use to make my decisions easier but I probably wouldn't follow mine either. Good investing.

 

[airlift]

No system or nothing is perfect sir, not even you, in your wildest apirations, expectations and dreams....."Betrayal"...ridiculous.

 

[tsptalk]

I tend to agree with Birch. Unfortunately I don't put my money were my mouth is. Every year Trader Fred and Ebb beat my return, yet every time they give a signal, I only take it if I agree.

That doesn't mean we can't discuss and debate the signals. But the benefit of a system is that it takes emotion out of your decision making.

 

[coolhand]

I tend to agree with Birch. Unfortunately I don't put my money were my mouth is. Every year Trader Fred and Ebb beat my return, yet every time they give a signal, I only take it if I agree.

That doesn't mean we can't discuss and debate the signals. But the benefit of a system is that it takes emotion out of your decision making.

For the most yes. But what about the emotion that comes when your signal was false, you've used up your IFTs, and the market races ahead while your on the sidelines? I would hope that this would be an anomaly and looking at the chart of the SS prior to this past March I would surmise that in fact it would be the case.

Systems are tools. They are not omnipotent. Never will be. As long as one has a viable rationale based on other indicators (i.e. sentiment) then one can choose to either accept a signal or not.

My thought about the SS is that in a "normal" market where fear isn't so rampant and volatility not so extreme, I probably would not have these whip-saw signals creating uncertainty. If things could settle down to historical norms I would be more comfortable with it.

I also think that most folks would prefer to have a basket of indicators rather than rely on any one. In the case of the SS, I think it could easily be the anchor signal in most cases with supporting indicators supplementing it in times of volatility. Like now.

I was wondering this weekend if maybe the signal itself should be "adjusted" in some way to help filter out some of these extreme moves. That's another project though.

One thing's for sure. It's generating a lot of interest and creating more interaction on the board. That's called synergy. I think there is a lot of appreciation for that element on the MB right now. It gets us all thinking. Nothing wrong with that.

 

[tsptalk]

If you come up with a way to incorporate SS with the TSP transfer limit, we should add it to the autotracker.

 

[coolhand]

If you come up with a way to incorporate SS with the TSP transfer limit, we should add it to the autotracker.

Let's just simply have a pure SS tracker. One that simply makes a move all in or all out for a given signal. We could split the allocation 35/35/30 CSI or 100% G depending on the signal. No interpretation. Successive signals in the same direction will be ignored. Only the first signal will count until another signal in the opposite direction occurs.