Quote Originally Posted by Paladin View Post
Tom,

The C-Fund has shown Market Weakness for about 26 days in a row including the Tuesday Fed Rally (if I'm counting all those triangles correctly). Can you ask Fred what it will take to see some Market Strength again? If the 3% rally on Tuesday didn't budge his indicator, then what will?
Trader Fred's response:

> Fred what it will take to see some Market Strength
>again?

The TSP Trader system looks for market patterns that
have historically been profitable at least 50% of the
time from their backtesting. The system looks for
these market patterns at the close each day using
about fifty computer programs. One of these programs
is the Market Strength program. It is not stand-alone,
but woven into some of the other programs, and depend
on their results, plus some daily market data (i.e.,
the "input").

It is literally impossible for a human being to
replicate what the computer does each night in one
lifetime. It is also not possible to know ahead of
time, that is predict the future, which Market
Strength input needs to move where to get a Market
Strength pattern that will support the Buy signals
from some of the other fifty submodels.

As mentioned in a previous response, there are
thousands of market patterns, some of which are
profitable, most are not. The fifty TSP Trade system
submodels have mathematically converted some of those
patterns into submodels the computer can run each
evening. There are thousands of market patterns left
to be converted into TSP Trade system submodels. The
number of possible future Market Strength patterns,
some of which would be profitable, most would not,
that would result from inputting imaginary data into
the Market Strength submodel is astronomical (i.e.,
approaches mathematical Infinity).

All fifty TSP Trader system programs look for the
presence tonight of historical patterns that have been
profitable 50% of the time during the backtesting. If
no such pattern is found, then no Buy signal is given.

Inputting imaginary future data sets immediately
results in many future market patterns any one of
which might be the real future market pattern that we
will all experience tommorrow. The TSP Trader system
trys to identify profitable past successful patterns,
not possible future market patterns, some of which
will be profitable, but most will not.

> If the 3% rally on Tuesday didn't budge his
>indicator, then what will?

All market timing models use moving averages. The TSP
Trader system is no different. The effects of
yesterday's rally were incorporated into last evenings
moving average calculations. What the fifty submodels
do with those particular moving average values this
evening or tomorrow evening (etc) with respect to
getting a Buy signal requires a future predication of
a "what if" scenario. As mentioned above, the TSP
Trader system looks for a match between today's market
behavioral patterns and similar market patterns that
historically have been profitable at least half of the
time. Looking ahead is not something the fifty
submodels can do as there is many possible futures
depending on the interplay between and values of the
imaginary input values.

Thanks for the questions,
Trader Fred.