A Second Attempt

The CMI will once again try to get out of the QLD trade. It was poised to close that trade last week but the market wouldn't allow it so we gain some more $$ and keep pace with the herd. Now up over 28%, the CMI has lapped my trading but just to be competitive I will keep watch for any signs of a retracement a try to capitalize on a potentially risky QID trade to make up some ground.

If next week's volumes do not match up with the market action, the CMI should fall into the 'no trade' zone after a very profitable two month run, If you see the bull and the bear together in the left sidebar, that will signal the close of the trade.

With the limited twenty-one month history of the CMI, it looks like there are between two and three profitable trades per year. The enemy of the CMI is most likely a flat market that does not deviate much from the 50-day moving average. Any trader could buy the market above the 50-day MA, and sell it when it falls below the 50-day MA. This is very profitable when large fluctuations occur. It is a little more painful when the market is flat as a trader will tend to buy when the market falls and sell when the market rises.

Once again, looking at recent history, the CMI will give up 20% or more a year by preventing some trading in a flat market and thus reduce a series of losses. The CMI has gained just under 100% in twenty-one months versus 160% if a trader were to use the 50-day MA as the only trigger. Maybe it all comes out in the wash but I will still tend towards the caution side.