Tuesday, March 27, 2012
Dr. Fly brought up a good point this morning. He said his in house over-bought indicator "score of 3.10 no longer present grave danger as it did 6 month ago". One has to be adaptive to the times. Are we in a bubble? If so trade accordingly and don't fight it. Is the trend strong? If so, downplay the oscillators and stay away from mean reversion trades. Most, if not all, systems will have conditions that make them invalid or less reliable. My favorite proprietary leading indicator, for example, became worse than garbage under the Fed's Operatoin Twist!