CMI Update: Melding 3.0 and 4.0

The CMI 3.0 has evolved into the CMI 4.0 over the last few months; signals are running on the same frequency more or less. True to form, the daily output from the 4.0 final chapter of the Cheetum Market Indicator has been much more responsive to market fluctuations and appears to be the best of any previous version when living up to the motto, "Never miss a trend". Maybe that should be, "Never miss a potential trend". This year is still an anti-trend year as far as the CMI goes, but this newer version appears to more in-sync with the market.

The chart below shows the 35 backtested trades and 4 actual trades of 4.0 dating back to 2007. This year is due for a long black bar anytime soon. One of those should confirm my glowing praise for 4.0.



The next chart shows the current, open QLD trade. Seems like a microcosm of the entire year; a random walk produced by a mechanism that cannot completely adapt to the multiple time-framed oscillations of the market.



The results for CMI 3.0 are posted in the left sidebar and currently sit at a weak -9.4% year-to-date loss while the CMI 4.0 is holding a (mostly) back-tested 8.4% gain for the year.

This year is dedicated to testing CMI 3.0 although the trade signals over the last few months mimic the newer version. Slight adjustments are allowed in the jungle. In truth, CMI 3.0 was the result of a record number of monkey-hours but a few too many 'patches' and a bit of hindsight bias mixed in with good data resulted in some increased 'wrongwayedness'.

The early jump into CMI 4.0 was due to a serendipitous discovery when comparing fast and slow signal several months ago. Why not give a glimpse into the future of CMI. Best to do it early as the world is still expected to end next year...or not.