Subject: Re: DBE effect on CAGR
Another repost of a previous message:

Author: mungofitch
Subject: Re: Please Translate These Current Timing Indica
Date: 5/27/2009
https://yorickm.com/Message.ph...

[Zeelotes wrote https://yorickm.com/Message.ph... :] Great post.

Keep in mind that the most difficult problem for anyone who practices timing is the issue of remaining invested when the market is in bull mode. They`ll keep going to cash or defensive positions while they should remain bullish and long. This will destroy their previous profits during the bear market. This is why it is imperative that you keep the right perspective. The market is bullish about 67-70% of the time.

I agree very much.

This is actually the reasoning behind the 99 day high signal, which Zee calls the "dying bullish euphoria" and which I think of as the "no new high lately" signal. It`s not necessariy to use it as a buy and sell signal per se, though it works for that. A very good use of it is this: when it is bullish, you can be reasonably certain you`re in a bull market, especially if it issued or reconfirmed its signal lately (even less than 99 days). When it is bearish you are not in a bull market. (just because you`re in a bear market doesn`t mean the market isn`t rising strongly for a while, like the recent bear market rally from mid March).
In short, bullish=good, bearish=unknown.

So, one possible use: if the 99 day rule is bullish stay long all the time. If not, either use a really good shorter term timing signal or stay away. This is in keeping with Zee`s warning that getting out of the market too easily during a real bull market is a bad idea.

Jim