GDX and IWM Clusters for June 7, 2011

[Pascal]

Pascal,

I have a simple question that may have been answered (many times) previous. In your note, you mention that if the Robot goes short today, it will close its position if the 20DMF gives a buy signal. Yet, in reviewing the backtests for both the Robot and 20DMF signals I see times when they are contrary to each other.

Does the Robot already trade in sync with the 20DMF signal? If not, why would it necessarily close today's short position if the 20DMF gives a buy signal?

Thanks.

This is a good question. In fact, the Robot is not "in sync" with the 20DMF, since the 20DMF is only one of the parameters. But, I noted that today's short settings are very weak. We can see that both the LT and ST settings have been steadily climbing. This means that when the 20DMF sends a buy signal, this will easily push the setting into positive edge. If no buy signal is issued, the settings will still climb higher I believe, but more slowly.





Pascal