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There's an implementation problem.

Don't think you understood what I posted.
You get out if your preferred signal tells you to get out. No problem.
If your preferred signal turns bullish, you get back in. No problem, right?
This is just the normal way we do timing.

If, WHILE YOUR PREFERRED SIGNAL IS BEARISH, there are huge negative breadth days, however you define it, you put some of your money back in.
If there are no such days, you wait until your signal turns bullish again.

Obviously, this is not going to work all or even most of the time, due to the whipsaw problem.
The question is, do the times when it helps outweigh those other times, such that long term returns are improved.

FWIW, I don't expect that it will work even in backtest. The statistics will just be weak, so even if there seems to be some benefit, I would be doubtful.


There's an implementation problem.
* You get a sell signal at 200 and get out.
* You get a "bullish" signal at 160, and get back in.
* BUT your sell signal is still saying to sell.
***> What do you do in this case, where your signals say to both BUY and SELL?


You're only using one signal. It can't be bullish and bearish at the same time, by definition.

Two. Two implementation problems.. (Shades of Monty Python. Nobody expects the Spanish Inquisition!)
We know that there are upswings (sometimes dramatic upswings) in an ongoing bear market. The recent swings in the DOW are a great example, swings of +500 and -500 points just a few days apart.
* You get a sell signal at 200 and get out.
* You get a "bullish" signal at 160, and get back in.
* Market promptly drops to 140, the bullish signal disappears and you sell.
* You get a "bullish" signal at 140, and get back in.
* Market drops to 120, the bullish signal disappears and you sell.
* etc.
Classic example of whipsaw losses. Ugh.
When do you stop buying and selling in a declining bear market? MOst people throw in the towel after the 2nd or 3rd time.


This is just the classic whipsaw problem, and it's independent of what I posted.


Mark
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