Detecting market tops and bottoms

[Tom K]

Answers to your questions about system 3

"What happens if the Sell Filter is in effect and CCI rises above -100, then (with the Sell Filter still in effect) it rises above 0 (before triggering a Sell signal), and finally the 20-day EMA crosses above the 200-day EMA?"

Anytime you're out of the market, you act on the first instance of any buy signal(in this case, only signals that pertain when the sell filter in effect). For example, if the sell filter is in effect and the CCI falls to -10, and then rises above "0" - that's a trigger to go long. Another example: If the CCI falls to -110, and then rises above "0", you go long. The "0" buy trigger is now meaningless because you're already long. Obviously, anytime you're out of the market when the sell filter is in effect, the EMA crossover signal is meaningless (The 20 day EMA is already above the 250 day EMA).

BTW, you caught another mistake of mine. The correct EMA is 250-day, not 200-day. Thanks for the catch!

Do you take 3 Long positions, a new one each time?
No. You only take one position, acting on the first signal occurance.

Also, does the filter always use the $COMPQ only - or does it use the underlying security that you're trading?
Use the security you are trading.

"If the Buy Filter is in effect, the CCI must first fall below -240 and then rise above -100 to generate a Buy."
You are correct. Sorry for the way I phrased it.

Thanks again for your patience. Let me know what you think when you get back from your trip. Be safe :)