Trev,

The equity markets turning "bearish for an extended period of time" would actually be an excellent environment for making money with the IWM robot. All the robot needs is a real trend to follow - up or down- to outperform significantly. I don't see the problem, quite the contrary since the robot could at last excel outside of a multi-month choppy market.

GDX is the least correlated instrument to IWM. Our previous research didn't find any instrument diversification improving the long term risk-adjusted performance of a 50%/50% IWM/GDX robot allocation. But we remain open to any suggestion with a proven allocation edge. If we knew an instrument that "proved generally bullish" when IWM was bearish, we would of course already have made a robot for it. I wish it was so easy!

Finally, in my view, the biggest mistake one can make is to be "fully invested at all times". Current times are a good demonstration of how ST/LT probabilities are simply unreliable because the backtesting sample of similar trend-transitioning conditions is too small. Your only probabilistic hedge is to stay in cash and so is the robot. Once conditions normalize, the robot's probabilities will be our best guide once again.

Billy