My market timing model was in full swing today and it flashed a BUY. Today was a lot of carnage and I suspect that we could go even lower from here. I hope everyone has their stops in place, :).
Normally I wouldn't move any money in the market until the low at 1276 on the S&P500 is taken out. Still, the market timing model is a nice short term trading model too.
If you went long when the model issued a BUY signal and then closed the position and simultaneously went short with the SELL signal flashed, you'd be sitting on some decent short term gains as my little chart shows. The danger in doing this is that the model was designed to issue BUY/SELL signals for a longer time frame and you could easily get a BUY signal and end up with negative returns in the short term.