We have had lots of MIPS members ask us "Why is MIPS Still Long?" The answer to that is complicated, but here is a sky-high view.
As we all know, ultimately the stock market is driven by fundamentals (booming economy, sales growth, higher profits, etc.). On the other hand, the worldwide press prints exaggerated news and professional day traders follow the good and bad news (also exaggerated). If individual investors try this they will most likely get cremated.
At MIPS, we run our hundreds of indicators, mathematical equations, pattern recognition, etc. each and every day, with the outcomes being one of those below:
1) Strong up or down trends across the board - Keep existing signal or issue a new one,
2) No consensus up or down across all algorithms - Go to Cash, or
3) No strong up or down consensus, but the current signal is the strongest of the bunch - Keep the
existing signal.
See the graph of the S&P 500 below (SPY) or attached:
- note that MIPS has been Long since 2/12/2019
- this graph shows why a good trading system like MIPS would not try to change signals and get whipsawed.
You can see that the SPY broke resistance in mid-Feb'19 and has been above its strong resistance and 200-Day moving average since then. Hence, there has been no real reason to change direction yet.
Also note that the market is now at a critical point in relation to the resistance level and its 200-day moving average. Any breach here would not be good.
Sit tight and wait for MIPS to tell you what to do.
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