The VLE and Tides Systems flipped back to Neutral today. The Weekly Signal and Modified Donchian Trend Systems kept us in on the long side.
Most importantly, the Qs are back above the critical support level of 44.39 from the August 16, 2007 low. A measured move from yesterday's low gives a target of 48.98.
While there may be some additional consolidation, it would not be surprising to see this rally continue to the latter part of May, which may be the high of the rally.
Good entries are important to trading success, but good exits are what book the profits. Trend following systems by design tend to give back a lot of profits except on a few very strong trends, which can be a source of great frustration. One of the areas that I am investigating at the moment is how to incorporate rational targets for profit taking in a trend following system.
It is true that trends tend to last longer than anyone expects, but it is also true that trends come to an end. The question is - Does trying to stay in to catch the big move add to the rate of return over taking profits at high probability target zones?