I am working on a system that will help guide us as the market tops and corrects. See the chart below.
Consider the following settings:
Slider=1000: looks back for the last 1000 trading days
shortperiod=20: uses a 20dma as the short term average
toplimit=8: it uses the top 8 trading strategies as input
buyconfirm=4: confirms all buy signals by waiting 4 days
sellconfirm=4: confirms all sell signals by waiting 4 days
If you note the chart below, you see that against the S&P500 tracking ETF (SPY) that this model avoided the worst of the last couple of corrections. This was also true in 2008 (not shown) during that major correction. Note as well, as a simpler matter, that if you simply watched the 200 day moving average (the blue line below), it is a pretty good guide of the state of SPY. That concept underlines the Dagnino process that we use for the monthly ETF strategy that we publish on the site today.