Despite the balance being in favor of buying on Wednesday, the momentum continued down, pulling the SSRatio into the negative, losing 0.30 to -0.10 favoring selling, the estimate of market risk rises to high. The SSRatio remained positive for 23 trading days, I hated to see it end since there has been so much made in the longs over the last several weeks. So maybe it will be just a whip, but I'd be very cautious adding long positions, just in case we are in for a down period. For the record, at least 80% of the time I try to subjectively judge the SSRatio I've been wrong. The Ratio has an excellent record of putting you in the market on the rises and keep you out of the steep drops, if you pay attention to the numbers and not your wishes. The money you stand to gain before the SSRatio turns up is small compared to the money you stand to lose if the Ratio is correct and market risk is high.
A "lite mode" recommendation is to reduce the number of shares you would normally trade, tighten your stops and quit for the day if stops get hit.
Sam
