Earlier I posted some postulations from Robert Prechter and Elliott Wave International relating to imminent changes in all markets taking place right now. They are pounding the table much the same they were in the fall of 2007.
How would my SPX Trend Model have done back then? Lets take a look:
SPX Weekly
The above chart is a graphical view of how my SPX Weekly Model handled market timing since the fall of 2007. I've omitted the SPX prices and the level in which the Model will next go SHORT, in fairness to my subscribers. After all, that is what they are paying for.
In the table below, I've described the returns available from following the Weekly Model in terms of the unleveraged cash SPX index.
There are but four trades in a little over two years and an average gain per year of over 50%. That's from what Prechter is describing as just Wave 1 Down and Wave 2 Up. He is suggesting that there will be three more waves in the years ahead and that the next one, Wave 3 Down, will be unlike anything we have experienced in our lifetimes. The entire sequence of five major waves, or trends, are great fodder for a Trend Following Trading Model like this one, as shown by the numbers in the table for just the first 2 of the 5 total waves.
If Prechter is right, this Model will catch it all. If instead the market continues higher, well, the Model is already Long. Trend following doesn't buy into Elliott Waves (directly) or any other form market analysis. It takes its cues from one source only, underlying price action.
Whatever lies ahead, I will be using my Models to navigate through it. There is opportunity in crisis, just as there is in nirvana. My Models are designed to cover whatever is coming, whichever direction and however dire, or calm, those financial winds blow.
Find something that works.
Then trade it.
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