QLD for Monday

The bull is back and hopefully the CMI is on right side here and that the whipsaw doesn't cut into the YTD gains. The CMI did not want to commit for several weeks. This was most likely due to the timing of the market buy/sell cycles. This illustrates the problem with many so-called systems. They do not have the flexibility to adjust quickly to these market cycles and end up giving buy signals when the market is starting a downward trend...and vice-versa. It can make us all look like one-legged baboons.

There hasn't been much time for posting since I am still in a tangle of squiggly lines that represent market peaks and troughs. Looks like it is all coming down to frequency and amplitude. I am working on the twentieth revision of the CMI 2.0 and I believe the best market direction indicator is just around the corner (provided that I can backtest through 2003). I am half way there and the results are better than ever so far. One hint: all indications are that longer term trades are the way to go. No great surprise but it is interest how the data keeps steering in that direction.