Wednesday, January 30, 2013 EST

The Stock Market Scout (SMS) model was redefined to include a broader number of stocks.  The model was based tracking QQQ because of price volatility and that typically QQQ lead the SPY more times than not. In the recent rally it was clear the large cap stocks (SP-500/SPY) outperformed Tech (NASDAQ/QQQ) and this lead to SMS staying stuck in neutral.  

In order to smooth out the difference between SPY vs. QQQ we included more stocks in SMS.  We ran some back tests and performed some comparisons and the results were improved in a sense that SMS is following a broader market and it not tied to just large caps or tech.  The model has been refreshed and you will see updated signals on the site.  The model (as stated on the SMS page) is still in a beta mode and will remain that way until we think we have maxed out on improvements.