The TradersPro is broken into two parts. A short term trend environment and a long term trend environment. The way one would interpret these would be as follows: The long term (defined as 6-8 months) market conditions could be Bull Market and the short term conditions (defined as 2-8 weeks) may be mild bear. This means the stock market has been trending higher and is experience a pull back or period of selling, within a Bull Market. This would mean that a trader should be aware that the bearish pullback may be an opportunity to get a watch list ready of stocks that can participate in the continuation of the existing Bull Market (MuscleStocks would be a good choice). If the market conditions were Mild Bear/Bear Market a trader should not buy stocks at that time due to a high probability of more down side. If conditions were Bullish/Bear Market, it means you are in a bear market rally and should not trade that kind of rally as aggressively as you would if conditions are Bullish/Bull Market.
The signal is entirely statistically and technically driven. There may be news in the market place that would seem to be good or bad, but Markets are always forward looking by 3-6 months. This means that the news we are hearing about now was anticipated or reacted upon by stocks 3 or more months ago. Our algorithm is fully based on technical analysis, and it does contain elements of trend, sentiment and reversal risk indicators. The method assumes that the market always knows best. As it trends higher we will trust that direction until it is proven wrong, which would happen by a new move lower. We would do the opposite in a down market. Our indicators use S&P 500 as the basis for all calculations.
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