etfmsolutions: Churn and Burn...02.09.15

Monday, February 9, 2015

Churn and Burn...02.09.15

Frustrating see-saw markets continue to be the dominate theme. I've posted about the lack of trend and momentum conviction previously and last night's post by Rob Hanna over at Quantifiable Edges (subscription service) illustrated that many quants share my perspective on the current difficult trading milieu.

Let me reinforce Rob's comments and repeat my previous strategy for trading this environment.... trade small or stay in cash.
Yes, we do have some new improvements to the M3 models but keep in keep in mind that P6 remains below the RSQ line in both models M3+ and LM and it has always been my contention that these are indicators that the trading paradigm is unstable and unreliable.
Eventually the technicals will kick back into line and a tradable trend will develop either up or down...until then caution and patience are critical...as is executing money management stops, either the defaults or discretionary, in order to minimize drawdowns.

Commentary and Updates

Mosaic Solutions commentary is typically published daily as time permits and market action warrants.
Posts feature Mosaic model updates including delta neutral stops, VIXEN directional trades and PONZO forecasts.

NOTE: Posted risk exposure indicators, signals and metrics apply to Mosaic models only. They are not directly correlated with price movement in the major market indices and can not be used to forecast directional changes in those instruments.
Each Mosaic model is a unique blend of risk factors and must be treated accordingly.

TRENDX is a proprietary Mosaic market signal that blends volume, RSI, momentum and rate of change.

ETF Mosaic Solutions and the editors of Mosaic Solutions are neither an investment advisory service nor registered investment advisers or broker-dealers and do not purport to tell or suggest which securities or currencies readers should buy or sell for themselves.
This site and related software products are for research and educational purposes only, and nothing herein should be construed as an offer to buy or sell, or as a solicitation of an offer to buy or sell securities, or to provide individual investment advice.

Investing is risky and past performance, whether actual or tested, is no guarantee of future results.
Any quantitatively derived allocations referenced herein should only be starting points for conducting your own research.

You are responsible for your own trading decisions and resultant gains or losses. When in doubt, please seek professional guidance from a registered adviser who can respond to your personal needs and risk profile.