Post New

The three bear catchers have remained firmly in BULL mode from April 15th to present. Clearly, it is not as easy as some may think to develop a sound method for daily tracking these three indicators. It relies on quality data, and from what I've read in the various posts just now, that is a hurdle that is not easily passed.

If you go to the horse's mouth, so to speak, you find there are 3,370 components in the Nasdaq.

https://indexes.nasdaq.com/Index/Overview/COMP

For Operating Companies Only I show 2,170 as of Thursday's close.

This is an explanation of the values originally developed by Robbie in GTR1.

Signal  SMA   NH/NL  DBE
0       Bear  Bear   Bear
1       Bull  Bear   Bear
2       Bear  Bull   Bear
3       Bull  Bull   Bear
4       Bear  Bear   Bull
5       Bull  Bear   Bull
6       Bear  Bull   Bull
7       Bull  Bull   Bull

Here is what the signals have been since the start of 2025:

Date      Signal  SMA   NH/NL  DBE
20260618  7       Bull  Bull   Bull
20260415  7       Bull  Bull   Bull
20260409  3       Bull  Bull   Bear
20260408  7       Bull  Bull   Bull
20260309  5       Bull  Bear   Bull
20260105  7       Bull  Bull   Bull
20251226  5       Bull  Bear   Bull
20251128  7       Bull  Bull   Bull
20251031  5       Bull  Bear   Bull
20250813  7       Bull  Bull   Bull
20250801  5       Bull  Bear   Bull
20250626  7       Bull  Bull   Bull
20250617  5       Bull  Bear   Bull
20250604  7       Bull  Bull   Bull
20250508  5       Bull  Bear   Bull
20250409  4       Bear  Bear   Bull
20250207  5       Bull  Bear   Bull
20250205  7       Bull  Bull   Bull
20250131  5       Bull  Bear   Bull
20250130  7       Bull  Bull   Bull
20250129  5       Bull  Bear   Bull
20250124  7       Bull  Bull   Bull
20250108  5       Bull  Bear   Bull
20250103  7       Bull  Bull   Bull

How might one use this information. One method I use is to invest in QLD (NDXx2) when all three are BULL, and move to SPY(SP5x1) when any of them are in BEAR mode. Here is what that would look like from 2025 to present. So this about doubles the return of the S&P 500 with a similar maximum drawdown at -18.90% for the S&P 500.

Dates       Trades  Metric      Value
1/3/2025    Bull    ROI         61.05%
1/8/2025    Bear    CAGR        38.79%
1/24/2025   Bull    GSD         35.02
1/29/2025   Bear    Sharpe      1.12
1/30/2025   Bull    DDD3        1.11%
1/31/2025   Bear    BBW         26.09
2/5/2025    Bull    Drawdown    -21.22%
2/7/2025    Bear    Bullish     54.12%
6/4/2025    Bull    Bearish     21.06%
6/17/2025   Bear    SP500 ROI   27.32%
6/26/2025   Bull    SP500 CAGR  18.07%
8/1/2025    Bear                
8/13/2025   Bull                
10/31/2025  Bear                
11/28/2025  Bull                
12/26/2025  Bear                
1/5/2026    Bull                
3/9/2026    Bear                
4/8/2026    Bull                
4/9/2026    Bear                
4/15/2026   Bull                

And BTW, if you employ one of the simplest bottom finding indicators I've shared multiple times on the MI Board you would have a signal for entry on 4/9/2025. Just that slight improvement changes the results to be:

Dates       Trades  Metric      Value
1/3/2025    Bull    ROI         86.84%
1/8/2025    Bear    CAGR        53.72%
1/24/2025   Bull    GSD         39.35
1/29/2025   Bear    Sharpe      1.35
1/30/2025   Bull    DDD3        1.17%
1/31/2025   Bear    BBW         33.54
2/5/2025    Bull    Drawdown    -25.15%
2/7/2025    Bear    Bullish     83.12%
4/9/2025    Bull    Bearish     7.17%
6/17/2025   Bear    SP500 ROI   27.32%
6/26/2025   Bull    SP500 CAGR  18.07%
8/1/2025    Bear                
8/13/2025   Bull                
10/31/2025  Bear                
11/28/2025  Bull                
12/26/2025  Bear                
1/5/2026    Bull                
3/9/2026    Bear                
4/8/2026    Bull                
4/9/2026    Bear                
4/15/2026   Bull                

The primary problem with the bear catchers is that they are way too delayed after major bottoms. The jet fuel applied to the market after a bottom is consequently wasted, or worse yet, if you are holding inverse funds or shorting stocks you will be slaughtered because those tend to do the opposite of what you hope for from a bottom forward. Those are the times you really need to be on the right side of the market's move.

So a 61.05% return goes to 86.84% with such a slight change. You simply are buying at 4/9/2025 the QLD holding rather than 6/4/2025.

do you go to "cash" or equivalent when 0?

mo asked: do you go to "cash" or equivalent when 0?

Absolutely! That would most certainly appear to be the correct choice!

Post New

Mechanical Investing FAQ

---

Contact Shrewd'm
Contact the developer of these message boards.