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 MarketTrak Question/Comment Message


Posted By: Mike   Date: Thu Jul 3, 2008

Title: ???????

Message:
  over time i have seen countless adjustments..readjusments..new configuations ..reconfigurations....etc etc etc etc..the latest ..i thought you were going to a BUY on June 30..now i see a BUY for one day and then back to "neutral"...where was it announced that you were going back to neutral..WHERE????

Response:
Mike,

  I want to first thank you for being a long-time subscriber. As you know from our past emails, I do listen and appreciate your comments.

  I want to address two issues. The first is the frequency of updates. The current version of the forecast system was installed on February 16 of this year, some 95 trading days ago. Since then, the model has returned a positive 10.4 percent while a buy and hold strategy would have returned a negative 9.3 percent. These results are obtained on a totally blind basis. No adjustments or changes to the forecasts were ever made. We have a very active research program and we do discover improvements that increase returns. When we do, we will change our model and start our model return calculation over from scratch. We are about to do that this Saturday. Version 16.2 will replace version 16.1. The new version is more accurate than the current version by about three percent.

  The second issue is the way we report the forecast. On the Forecast Summary at the top of the forecast page you will find the closing trading position stated. You will also find the trading position at the close of the next trading day. If they are different, then a change in position is suggested. Normally, I will send an email alerting you that a position change is about to occur. At the close on Tuesday of this week, the model moved from long to cash. It then moved back to long at the close on Wednesday. I didn’t notice this was going to happen since the ANO barely dropped below the long set point. The Summary did indicate that these position changes were going to occur.

  I hope this addresses your concerns. If not, please email me your phone number and I will call to continue the discussion.

Regards,
Rich

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