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As of Friday’s close our Dual Bollinger Band
chart generated a Buy signal, with our Time Series
Forecast (the Red Line), moving above the Shorter Time
Frame Lower Bollinger Band (the lower Green Line). We
would now expect to see the markets continue on the
upside into the mid-December time frame that we have
discussed previously.
The correction we saw from the November 6th
highs was short-lived, and our previous signal turned
out to be an unprofitable one. As our system is
basically a trend following system, we are susceptible
to some of the same pitfalls as other trend following
systems. The difference is we believe our system can
identify trend changes quicker, and minimizes, but does
not eliminate whipsaws. Although some trades will be
unprofitable, we believe in the end we will be on the
right side of the market more often than not.
As we look at our Dual Bollinger Band chart we
see the Time Series Forecast has moved above both the
Shorter Time Frame Lower Bollinger Band, and the Longer
Time Frame Upper Bollinger Band. At this point we must
be cautious about the Forecast moving back below the
Longer Time Frame Upper Bollinger Band, as this would be
our Sell signal. We still see some of our indicators
pointing to an overbought condition, and are somewhat
concerned that almost everyone is saying we have reached
a bottom (usually a sign of a top), we will feel the
market still has some upside as everyone tries to jump
on the bandwagon. Historically the period from now until
the end of December or early January is an up period for
the market. It also tends to be a bit choppier than the
October to November period, which historically shows
sharp up moves as we experienced this year.
Taking a longer-term view, our Weekly charts have
also generated a Buy signal since the upturn in October.
With this in mind we will follow our charts, and stay on
the right side of the trend. We invite you to follow
along with us. |
