As promised yesterday, here are a few more charts and analytics on the WORLD model.
First, the 11 component charts.....and the thing to note is that virtually all of them are currently upslope, both with the RSQ and the P6.
This isn't always the case and when things do turn downslope the majority will follow in the motif of herd mentality....if it's bad in Germany the ripple effect will likely be felt in Australia. Obviously this isn't a hard a fast rule...there will always be economic factors that give a momentum edge to one economy versus another and those differentials are a stellar investment window via the model.
The other consideration of this herd mentality tendency is the need to follow the various P6 stop signals.
Using the various P6 permutations for confirmation its rather easy to identify the higher opportunity "sweet spots" and to avoid the black holes of drawdown. Spending some time each day watching these signals unfold for a few weeks will either convince you that there's something there...or not.
Then there's the performance results for the WORLD versus SPY, which is actually a WORLD component representing the US. The World is clearly more volatile over the 2 year lookback...which accounts for the current great short term returns versus the SPY, but also emphasizes the importance of not dawdling with stops when momentum turns down.
Most experienced traders will tell you that pulling the trigger either in or out of a trade is not easy...which leads to a couple trading axioms that also apply to longer term investors:
1. Anybody can get into a trade.....its when you exit that matters.
2. It's better to be out of a stock (or ETF) and wishing you were in it than being in a stock and wishing you were out of it.
The various stops are your best friends, don't ignore them.