MarketTrak Question/Comment Message

Posted By: Jim   Date: Wed Sep 19, 2007

Title: Curious Model 8.2 vs 12.1...2 Questions

  I really liked version 8.2.
  It got me out of the market prior to the big market drops of last February and July.
  2 questions:
  (1) Did version 8.2 also indicate a sell-short position prior to yesterday's biggest point rise in the last 5 years?
  (2) If it did not, and if it was either long or in cash, will you also show the daily update of version 8.2 on your home page, as you do for version 12.1?

  I still monitor version 8.2 and all previous versions. Version 8.2 shows very similar results to 12.1 as it is also short at this time.

  The rally yesterday was not predicted because the big drop in interest rates was unexpected and therefore not reflected in the market data input to the model. Shocks like this can be protected through the use of stops or other hedging strategies.

  Thursday update: Our development program has produced many acceptable models. Most are still being evaluated and analyzed. Version 12 is the latest model but there have been other very good ones like version 7 and version 8. Even version 2 produces very accurate results. Our work on model building will continue until we are satisfied that we have found one that will produce profitable results over a long period of time and with minimal drawdowns.

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