Thursday, September 27, 2012
T 3 Update 9.27.12
The model has held up well into the past few days of market weakness thanks to the weekend rotation into XLV (Health Care Spyder) and the stability of GLD (gold)...which have offset weakness in IWM (Russell 2000).
T3 left some short term money on the table with the TLT exit ALERT on the 25th but that's the way the delta bands (DB) called it, so we need to follow the rules and post the signals.
Keep in mind that a yellow signal means both the MRSI and DB signals are Long. However, if either of those systems produce an EXIT signal then the trade is closed. In this case the DB system signaled a close while the MRSI was still Long. Perhaps we should have just closed only 50% of the position, but that's the benefit of hindsight.
The TLT trade was still able to book 1.9%, so it was not all in vain.
Monday we'll take a look at a possible new addition to our ALERT signals, a tattletale called RCCI, which combines the oscillator forecasting abilities of the RSI (Relative Strength Index) with the CCI (commodity Channel Index). The system has performed steadily for years with the major indices so it may be time to include it in the ALERTS stable.