Jim, I generally agree with your views and head/tail approach. I have no illusions about BAMBI. It started as an experiment and still is.
Bill's approach looks for the big moves. BAMBI simply attempts to quantify the current trend. I started it the end of Jan when there were a lot of comments on the thread that believed that the rally that started in mid-Jan was a suckers rally. I didn't think so and decided to go out on the limb, saw in hand.
BAMBI is based on the weekly MACD, which itself is reactive in nature, not predictive. Take MRK as an example. It closed Friday at 116.50 and issued a bear signal. That is little consolation for the folks that bought in the middle of the uptrend in the 120's. But, BAMBI has been reflecting MRK as a "3" (i.e., trend possibly changing for over a month). But, it has been showing T as a "5" (clear bear trend) for about the same period, and its been a flat-line on price.
BAMBI is looking at the market in a similar fashion as your head/tail approach, but looking at the DJIA as the head and the S&P 500 as the tail. I recognize your position that there are many companies in the S&P bigger than those in the DJIA. That's understood as I'm just trying to get a general picture.
When the overall trend is clearly in my favor I propose an aggressive 100% approach. But, now I propose a 50/50 approach (being selective and conservative), as a negative trend has not been clearly reflected, but it is clear that this great bull run is getting weak.
But, again, this is an experiment, so BWDIK.
Berney |
