Monthly Reversal Failures December 2018

Multiple software developers performed extensive back testing of the Armstrong Reversal System.

They found that, statistically, on average, the system produces losses even without the consideration of fees, slippage and other effects. The losses are so bad that systemic market manipulation must be considered. For details, see Socrates The Market Manipulator.

It is possible however to produce gains during random short periods of time. Still I consider it futile to discuss the performance of the system in great detail based on such singularities for multiple reasons.

First, Martin Armstrong in hindsight uses the ambiguity of the trading rules built around it to fraudulently misrepresent the performance of it in such a way that it appears as if it never failed, and he typically blames and abuses (gaslights) his clients in such cases.

Second, Martin Armstrong does not provide the historical data of the system for examination. I do have a large cache of that data though.

Third he changes the rules of the system in hindsight to mark an obvious failure a success. 

In this context it is instructive to document a snapshot of the following large scale Monthly Bearish Reversals failure across multiple markets.

The Reversals were elected on Dec 31 2018 and the Profit/Loss for a short trade with a close date of Jan 31 2019, the one month unit of time for a Monthly Reversal is recorded for a selection of markets covered by Socrates:

Symbol	Reversal	Close	Next Close	P/L%
BAC	2511	2464	2847	15.5% loss
COMP	680595	663527	728174	9.7% loss
$DJI	2399720	2332746	2499967	7.2% loss
FCHI	499506	473069	499272	5.5% loss
GS	18151	16705	19801	18.5% loss
RUT	149877	134856	149942	11.2% loss
$SPX	268235	250685	270410	7.9% loss
TCMP	149185	143229	155406	8.5% loss
XOI	122281	115910	128401	10.8% loss
/CL	5070	4541	5379	18.5% loss
/HO	16940	16794	18774	11.8% loss

Notes:

The $DJI reversal election has been disputed by Martin Armstrong on the grounds of a non-election of another reversal (this is not a signal, it is the absence of a signal). I am quoting him, emphasis added:

The 3rd monthly bearish at 21600 was not elected at the end of December in 2018 but elected 2 others including 23997.2. The market made an intraday low at the 21700 area in December holding the 3rd monthly bearish which cannot be argued against... I wonder how many other mistakes there are.. This is a false representation of performance. He is guilty of the very thing he accuses Armstrong of doing. Lol

The undisputed fact is that at this time, the implied rule, the "Elected Reversal Invalidation Rule" as I call it, which forces the invalidation of an elected Reversal by another non-elected Reversal, does not exist in any of the Socrates reference documentation The Reversal System. The rule is therefore made up in hindsight as usual - here for the single purpose of discrediting this entire analysis - and more generally to fraudulently misrepresent the performance of the Reversal System, creating the false impression that Reversals never fail.

In case you wondered whether Armstrong has a different set of rules for his advice given in subscriber blog posts because he often advises against following his bad advice (downgrading it as opinion in hindsight), here is the proof that this is all smoke and mirrors:

Martin Armstrong Financial Advice: Do not buy the Low!

Which directly applies to this scenario. You are welcome to compare the dates. 

 

See also:

Socrates Long Term Past Performance Review

Weekly Superposition Event in the DOW October 2018

Quarterly Superposition Event in Gold 2015 

Socrates Subscriber Testimonials