<<Warp, as you know, my internals-based indicator system is more of a trend follower than an OB/OS gauge>>
Hi Augie,
Normally I would show an out signal after a day like today, but the depth of Fridays oversold condition was so severe that I am still showing a decent oversold condition. But, I am reducing my exposure from 200% to 144% as a result of a partial profit stop getting hit.
If I relied on my feelings based gut, I would likely take todays 2.00% NDX gain and go home. But if I relied on my gut to make all my timing decisions, then I would be broke. Better to use an Excel model to identify short term situations that in the past have had an excellent statistical probability of success.
This said, as I scan my back tests, there were a few instances in the past where my model waffled around in a state of mild oversold for weeks at a time, keeping me stuck in a long position unable to escape. . . .
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