Subject: Re: Have Bear Catchers worked post-discovery?
So MT1 is objectively a failure when it comes to successfully catching bear markets.

A valuable analysis! As well, other backtests (5-10 years ago) have come up with a "NH/NL and any 1 other bearish - out, any 2 bullish back in" as, to my memory, being the most effective permutation (BCC <4 or something out, BCC >=4 or 5) - others could dig through datahelper to confirm.

Yep, the S&P has crushed all. One caveat to the conclusion above: Mechinv's starting date of 1/1/09 is "cherry-picked" to align with a definition of post-discovery. When the BCCs were developed, the backtests included the top of 07 and the bear market of 08 as well as several earlier "long-developing" bear markets. IF IF IF the BCCs had been available, known and used by starting lets say mid-07, an investor would have saved a massive drawdown and that significantly affects this conclusion.

Similar to many of the screens being affected to the wrong side, by many market and technological changes since the late 90s / early Aughts, the "99D" and the SMA Slope (and the 26wk/52wk ratio) were tailored around slower-developing and longer lasting bear markets that had been seen up to that point. There hasn't been one of those since 08-09. The shorter / shallower corrections don't fit, and the '22 bear is really the only one that comes close - but because it had a sharp peak with a fast drawdown (interest rate policy change-driven), a lot of the damage was done before the slower acting 2 fired bearish.

Which is a part of the reason that Zeelotes developed and backtested a 150-day version of the "99D" BC which had somewhat better results by keeping people in the market longer.

FC