HOW DOES THE MODEL TREAT SWITCH SIGNALS?
Index Moose is a weekly model, and for simplicity only contains Friday COB (“close of business”) data. The instruction to switch is usually published over the weekend. Signals are based on the closing prices from the previous Friday. The model is calculated as if it changed automatically at the Friday close. It is done that way to maintain data consistency. Of course, that is a synthetic construct. In reality, investors’ first opportunity to act is Monday, and they must make the best short-term calculation they can in the following week(s). The goal is to get in at or below the Friday closing price. Sometimes that is possible and sometimes not. For more information on this topic, see “The Art of the Switch” on the MooSignal page.
