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Re: positiontrader post# 167

Tuesday, 10/15/2002 10:05:04 AM

Tuesday, October 15, 2002 10:05:04 AM

Post# of 215
Positiontrader

I began taking aggressive long positions in late July as my contra-trend indicators fired numerous bullish signals - see charts. The way my model is constructed, the contra-trend indicators lose points (an average of one point every two weeks) as time passes. By late August, my trend indicators never turned bullish. My model is constructed in such a way that the trend indicators usually takeover (turn bullish) as the contra-trend indicators fade to neutral. By September, my model was mildly bearish and my exposure to stocks was down to 50%. Last Wednesday, my contra-trend indicators started to fire bullish signals again.

As you can see, my model never goes from 100% long to 100% cash (or short) in a day, or even a week. The last intermediate cycle was fast, but not unusual for a bear market. I'm not a short term trader, but I listen to my model. Right now, I'm 100% long. That may seem to be a bit ballsy, but I trust the reliability of my indicators - I've spent a lot of time developing them.

In the end, I believe it pays to be aggressive at bottoms but to ease off rapidly if trend indicators don't follow suit. I'll be watching Big Trend and the NH/NL Ratio closely during the next few weeks. If they don't turn bullish soon, I'll be selling off chunks of my portfolio again.

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