Market Exit Signal: Missed a Fakeout

I didn't mention one other fakeout by the market signal. I consider it a fakeout because I do not use this as a short-term timing signal because there's no buy signal. The signal goes to buy when the spread stops rising. However, back in 2012 there was a correction of about 4 percent around the presidential election. You could have shorted when it first went through in September 2012 and gotten shaken out when it fell below 5.50, but if you went back in on October 31, you would have caught a 4 percent down move. Not worth the hassle of going short unless you're towards the daytrading end of the trading spectrum.

I prefer using this as a long-term signal, combining it with other signals to confirm a top is underway or even past.