XLX models bought oversold in a sinking market

[pdp-brugge]

Pascal,

The sub-components XLB and XLI changed from short to bought oversold yesterday.
When I look at their MF graphs, they both are sinking fast.
Why is the bought oversold call made?
Is this call based on OB/OS data that are not present in the current Real Time panes?

PdP-Brugge

[Pascal]

I know, this is disturbing.
These models have been designed to "Buy fear."
Because there are 9 XLX, the idea is to balance a portfolio by trading three or four of these signals, using those signals that have shown the best returns in the past.

As you can see below, buying oversold conditions for XLI and XLB have produced rather good returns since 2010.



Pascal