The 'No Trade' Trade

No wonder the CMI wasn't ready to jump into a QID trade. The 'No Trade' signal was generated due to the bullish price action and volatility of the last trade. This 'No Trade' signal has occurred eight times since 2007 with the following cumulative results if the 'No Trade' signal was ignored and the QID trade was taken...



The red line represents the cumulative gains and losses (if the QID trade was taken each time a 'No Trade' signal was generated); the gray line represents the days in each trade. Individual results are as follows...-2.5, -11.1,-1.7, -7.1, -15.4, -6.7, +11.4, -6.8.

Seven of the eight trades resulted in a loss... One trade from last year would have gained 11.4%. Overall, it seems like a good argument for staying in the QLD trade...and good news for those that are still long. Even so, the CMI is not convinced. This means that the CMI is still more bullish than bearish for now, but not impatient or impulsive, and not willing to re-enter the QLD just yet.

If it was up to me I would like to open a can of whoop-ass on the market for driving my last trade down into submission, and get back into the trade ASAP. Luckily the CMI doesn't 'think' that way. As I always say, "You can take the monkey out of the trading system, but you can't take the trading system out of the monkey".

If there were more data points, I'm sure we could convince the CMI to flash the buy signal a little earlier.