My indicator mix was based on three things: 1)Available data on Stockcharts.com 2) Ability to develop historically meaningful intermediate term indicators and 3) a reccommendation by NDR to use at least 50% tape indicators for any stock market timing model.
To answer the second part of your question, my model is heavily weighted with price and breadth indicators. I was 100% in stocks until 4/18. The model began falling when several breadth indicators moved into overbought territory, I reduced exposure accordingly.
I score breadth trend indicators in a manner that takes into account their ability to identify trends AND OB/OS areas. For example, if the bpcompq is rising (above it's smoothing), I'll give it a +1. If it's overbought but still above it's smoothing, I'll give it a zero (neutral, because risk is high but a reversal isn't necessarily imminent. If the bpcompq is OB and begins to rollover, I'll give it a -1. If it's OB and falls below it's smoothing, it will get a -3 (high likelihood that a reversal has taken place - risk is high).
Obviously, the combination of breadth indicators going OB, volatility indicators showing complacency, and price momentum weakening were enough to bring the model down from extremely bullish to moderately bullish levels. In short, risks was rising. That's how I use the model. You might opt to be 100% invested when the model is above zero and 100% in cash or short when it's below zero. I'm not a black and white guy.
Tom K-- I was wondering about
