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URL:  https://boards.fool.com/gtt-timing-32523262.aspx

Subject:  GTT timing Date:  12/18/2016  8:03 PM
Author:  rrjjgg Number:  264859 of 274646

musselmant,
http://boards.fool.com/better-timing-rule-ma200-plus-economi...,
brought GTT timing to our attention.

The author of the post there,
http://www.philosophicaleconomics.com/2016/01/gtt/
suggested a timing system as follows:

first check for signals suggesting a recession;

if no recession is on the horizon, then stay in the market with no use of timing methods based on trend following or price momentum;

when some some evidence of economic weakness or a recession appears, then use regular timing signals, like 200 SMA type signals or others you prefer.

The idea was that something like a 200 day SMA timing method whipsaws too much in a good economy to be profitable, making timing under perform, so save the timing for recessions, where the exit/entrance signals are usually further apart allowing timing to be profitable and limit drawdowns.

He suggested two of the 7-8 signals at the Fed could be used, or all, if you prefer. The signals one has to use are always delayed at least one month, but if you'd like to try them here they are:

https://fred.stlouisfed.org/graph/?g=3asR

This is back on Nov. 1, but is high enough that I doubt it's showing a recession by Dec 1, so it says all is fine with the economy. No timing needed.

The next is not so good

https://fred.stlouisfed.org/graph/?g=3atC

but is close to zero and with the 'Trump bounce' has likely turned positive by Dec 1.

With this signal showing weakness the GTT scheme tells us to use timing for the next month, December.

Two of our signals are related to regular momentum strategies and/or trend following, the SMA is a trend follower and NH/NL probably attempts to predict near term changes in momentum, so I'd say it was a (non-classical) momentum strategy. Entrances in DBE are momentum based, but
exits are based on estimates of the time it takes momentum to disappear, so I won't place it as a momentum strategy of the type
the GTT author used. It's some kind of a hybrid.

rrjjgg
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