Looks like the Cheetum Market Indicator (CMI) is trying to think outside the box. The purpose of the no trade option was to prevent entering into a QID trade during brief retracements in a uptrending market, after the completion of a QLD trade. Suddenly the CMI is cutting off the last QID trade in mid-stream making it clear that weak and conflicting signals are good enough reason to get out and wait for a better opportunity.
Maybe tampering with the "air-fuel ratio" set off some sort of weird butterfly effect in the CMI's processor. Sorry, that's the grease monkey in me speaking. Anyway, the CMI is at the helm for the duration.
I'm not insulted that the CMI has taken control after my programming lead to a 16% deficit with five month left in the year to reverse course. The market has to shake out all those longer term, inflexible, trend following systems, including this one, before resuming another steady incline or decline.
Danger, Will Robinson!
Be prepared. Once you start leaning solely on your favorite oscillator, the new trend will kick in rendering the oscillator useless. Apparently, the CMI thinks it can adjust to either scenario.
By the way, if there's actually a Will Robinson reading this, don't be alarmed. The reference is from the Lost in Space series. See below. Will is the little guy on the right.
Friday, July 22, 2011
The No Trade Loophole
