A Simple Method To Improve IBDs Market Calls

I was tooling around in free stuff at http://www.decisionpoint.com/ last night studying the thrust/trend model (TTM) that Carl Swenlin uses, and it occured to me that IBDs follow-through method is quite similar in concept to the thrust component of the TTM model.

What would the results be if we added a trend filter and a confirmation to IBDs market calls? I looked at a couple of different ideas, but the simplest seems to be the following:

Trend Filters
1. The macd of the SP500 or Wilshire 5000 (choose 1) must be greater than its signal line.
2. The macd of the market or stock being traded must be greater than its signal line.

Confirmation
1. The SP500 or Wilshire 5000 (choose 1) must continue higher the day(s) after a confirmed rally call and before a market in correction call.
2. The market or stock being traded must continue higher the day(s) after a confirmed rally call and before a market in correction call.

By adding the trend filter and confirmation to the Qs for 2008 using IBD market calls, the performance went from a CAGR of 29.30% to a CAGR of 45.85% - a substantial improvement. This brings IBDs performance in line with the other higher performing trend following systems.

Using the above, we would not be a buyer today because the macd is below the signal line for the SP500, Wilshire 5000 and for the Qs. Also, the markets do not appear to be continuing higher after yesterday's confirmed rally call. Should the trend filters turn positive and we have the markets moving higher before a market in correction call, then and only then, would we consider buying using this modified method.

I hope this helps those who have been whipsawed as many times over the years as I have using IBDs market calls.