Selling pressure intensified this week, which finally pulled the S&P 500 into a short term down trend. The chart below shows the buy and sell signal generated by my system:
The signal generated in the summer started off quite well, but ended being only marginally profitable as the trend quickly reversed. The stocks I selected I think did good (but not great) and I calculate that I am up 15.22% YTD.
Now that the short term trend is down, I cannot own any stocks in my account. Bonds, however, often do well in this environment:
Immediately after unloading all of my positions on Friday, I bought the long term bond ETF, TLT:
Notice how this chart is breaking out just as the general market is breaking down. Meanwhile, Canadian bonds are also looking strong, making a new record high on Friday:
