The Model. The KP Trend Model is Green. Full policy exposure to US equities.
From the Trading Room. It has been just one week since our trend model returned to Green on Friday, April 26 after a very brief six trading days in Yellow status.
As we’ve said many times, the Model doesn’t read newspapers and thus doesn’t “know” anything. As tempting as it might be, we can’t read any special meaning into these short-term reversals — they simply reflect the underlying mathematics which process a mountain of daily market data.
Given the inherent tendency of financial markets to move in trends, these short-term reversals are relatively rare.
The Intermediate-Term Model (above), which triggered this most recent event, has produced changes of direction 5.2 times a year on average over the past 26 years. That average includes a handful or two of those short-term “oops, excuse-me” events whenever they occurred. More than 18 years of that track record now represents real-time performance.
