No Reversion To The Mean - October 4, 2011

[senco]

Billy, if the GDX stop is hit today, and then the secondary entry (50.61) - will the 'formal' robot issue a primary long entry at the open tomorrow? If so, will the stop level to be tracked be appropriate to this secondary entry? ... I am trying to determine whether to use the secondary entry in case the bottom falls off today.

[Pascal]

Billy, if the GDX stop is hit today, and then the secondary entry (50.61) - will the 'formal' robot issue a primary long entry at the open tomorrow? If so, will the stop level to be tracked be appropriate to this secondary entry? ... I am trying to determine whether to use the secondary entry in case the bottom falls off today.

If the GDX stop is hit today, the GDX Robot will be in cash for one trading day.
This is because GDX works on a reversal mean of large movements. When it hits a stop, this means that there is probably more to go in the same direction and hence the robot waits one day for things to clear up.

Pascal