Mar

8

Tim Hesselsweet wrote: "The almanatarian introduces a little low n counting."

Thanks to Tim for bringing this to our attention. Beside the low number of observations the study seems to have another odd methodology. It is the average subsequent extreme low readings. To trade this one would require actually catching that low precisely. The study is moot on the subject of how to catch the annual low.

However, looking at the same data over the entire period there is a way to trade it. If we sell at the recommended point and see where we stand at the end of the year we find that we missed out on a 4.7% gain for all the periods. To see how it has done recently we can look at the last 12 years worth of signals. These recent sell signals would cause us to miss out on an average 10% gain for the rest of the year.

In this case it is best to ignore the signal.


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