Ray wrote: Possibly doing a hold of 3 weeks or 15% gain, and then taking the gains off the table would work out ok. But you still need some method to keep you out in times like 1999-2010.

My primary purpose for strategies like these that I've built is to limit exposure to the market. The thought process comes from the whole Black Swan even probability. One way to mitigate risk is to limit time invested. Of course, it is not a complete removal of risk. For the trades I posted above you end up being invested 32% of the time. So your risk is completely eradicated for 68% of the time.... to the degree that holding cash equates to no risk. :)

There are many ways to identify bear markets. Some of them I've shared with the MI board, my best ones I have not, but it is certainly possible to identify periods of high risk with a pretty high degree of accuracy. Once you have done this identification, you actually do not sit completely out for the whole period. Rather, you employ inverse funds in the same way you employ long funds. In fact, if your indicators are accurate for doing that, the success rate of inverse fund trades in a bear market are way better than long funds in a bull or flat market. And the returns far exceed... the reason is simple. The market tends to take the stairs on the way up, but the elevator on the way down.