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Forum: System: Schulenberg 2X-Hedged IWM (^IWM2)

New?Last PostPosted By#Subject
10/12/12 (0:29)Craig Schulenberg1Market Timing Indicator + Prediction for 10/12/12
10/10/12 (0:45)Craig Schulenberg1Market Timing Indicator + Prediction for 10/10/12
10/09/12 (0:02)Craig Schulenberg1Market Timing Indicator + Prediction for 10/9/12
10/07/12 (23:02)Craig Schulenberg1Market Timing Indicator + Prediction for 10/8/12
10/05/12 (0:50)Craig Schulenberg1Market Timing Indicator + Prediction for 10/5/12
10/04/12 (0:25)Craig Schulenberg1Market Timing Indicator + Prediction for 10/4/12
10/03/12 (0:07)Craig Schulenberg1Market Timing Indicator + Prediction for 10/3/12
 
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*** PREDICTION for the Next Trading Day:
For Friday we say: "Bounce? Yes, conditions look favorable for a bounce on Friday -- namely, the indicators are rather bleak. The Market Timing Indicator (MTI) has gone negative once again (to -0.2800), and thus is well below the 1.0 'neutral' value. Also, our Market Assessment (BNB Indicator) is only 'Neutral', and we have a RED (Danger) Market Color Code. Still, our neural networks are somewhat more optimistic, and this is usually where we see the bounces coming. The long-term (mutual fund) signals remain in the BUY state, suggesting that this market is relatively 'firm'. We expect that the market will at least 'hold' near current valuations on Friday, but is much more likely to recoup some lost ground".

*** Scoring of Previous PREDICTION:
For Thursday we had said: "It is irresistible to make market predictions because we have 'predictive' models, and besides, it makes life a lot more interesting. Our Market Timing Indicator (MTI) remains at 1.0 (the 'neutral' value), but our market assessment indicator (BNB) is still 'slightly Bullish'. Clearly the market is having some trouble committing to a course of action, and we do have an ORANGE Market Color Code (our 'anything can happen' color) for tomorrow, but still we think that the market will at least 'hold' near current valuations ... and is pretty likely to move somewhat higher."

How did we do? The Forecast for Thursday was clearly wrong ... thus ending our string of recent successes. We have added a new algorithmic rule (based upon our Prediction Table) that 'would have' generated a Cash signal (and also improved the 9-year back-tested performance as well), and this 'may' detect the next occurrence of this particular set of conditions. This was actually a significant improvement, and unlike most it was arrived at relatively easily.

*** 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)
  
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