Yes, DBE is a long lag indicator.

DBE will not protect you from a more sudden, sharp bear drop like the max 19% drop starting in November '21. The good news is that it is not as susceptible to whipsaws as some of the other indicators. That said, *in a volatile market it is slow to react*. It's not intended to be used in isolation.

For that matter look at the Coronavirus crash in '20. DBE did not go bearish until after the fastest crash in history followed by the fastest recovery to almost where it was in December of '19, then flipped back to bullish in 5 days as the recovery continued and set a new high. One needed to use other indicators to get a picture of what was really happening.

It's a great indicator for a less volatile, calmly & slowly declining market situation - like the beginning of the GFC bear in '08.

Hope that helps.

FC

Mechanical Investing FAQ

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