*** PREDICTION for the Next Trading Day:
For Wednesday we say: "What a difference a day makes! Our Mutual Fund timing signals (e.g., MFTI-A) has just switched back to a BUY. It has been in a SELL state since 7/25/11, and this signal switch 'may' indicate that we have finally bottomed out and are heading back up after a month of malaise. In any event, the Market Timing Indicator (MTI) has now surged to the moderately strong value of 1.1618, i.e., it is now ABOVE the 1.0 neutral value (whereas it was actually negative the day before). Our Market Color Code is now BLUE, our 'relatively safe' color. Although our BNB market assessment indicator is still 'Neutral', we expect that the market will close at least modestly higher on Wednesday".
*** Scoring of Previous PREDICTION:
For Tuesday we had said: "We 'may' have another gap-up at the Open on Tuesday, but if so then the market is likely to fade once again. Most of the Shorts that we initiated at Monday's Open will continue for Tuesday. Our Market Timing Indicator (MTI) remains negative at -0.3881, and thus well below the 1.0 'neutral' value. Our market assessment indicator (BNB) is 'neutral', and the market will likely close flat or down yet another notch. Of course, at this point the market is quite capable of a very major selloff, and that is why continued Shorts are appropriate. Our long-term (mutual fund) signals have been in the SELL state since 7/25/11"
How did we do? The Forecast for Tuesday was right only to the extent that we had anticipated a 'gap-up' at the Open; we certainly did not anticipate that the market would increase in strength during the day rather than fading.
*** Note 1: The MTI can range from about -2.5 to +2.5, with a 'neutral' value of 1.0. A value of 1.0 will generally be associated with a market that is either stable (holding its valuations) or rising slowly and erratically. Values greater than 1.0 signify a 'long' market, while values substantially below 1.0 (and especially zero or negative) signify shorting situations. Although the MTI is extremely useful (especially in the construction of equity-specific models), bear in mind that it has a reaction time of several days. It is thus not sufficient to use this indicator alone for trading specific equities on a day-by-day basis.
Schulenberg 2X-Hedged IWM (^IWM2)