As we've mentioned, the monthly long/short dates were developed as a way of getting in approximate synch with the fact that the index markets tend to have their biggest advances in and around the end of a month.  Numbers were optimized for best results of being long and short to as close to an equal duration as possible (roughly 15 days on each side). 

The testing generated “21” and “6”.  If the date is the 21st or as close thereafter as possible, you switch from long to short.  If it's the 6th or as close thereafter as possible, you switch from short to long.

You get wide variations from the mean on this, particularly if you're near the flip dates.  We're still in monthly longs because Friday was 5, not 6.  If Saturday were a trading day, that 6th date would have triggered a short for Monday.  You can see how that gets rather arbitrary, but we're system traders focused on the whole array of our numbers, not the individual trade at hand.  We have to draw the line somewhere.  Maybe tomorrow's clear cut monthly short will mesh better with whatever the dailies are showing.  Maybe that will portend good results�"maybe not.

Maybe none of this means too much.  If you've been following the dynamic monthly biases in a mechanical way, then our best advice is follow the systems.

Dynamic Monthly Biases for August 8

Hold all positions.  Stay long in the S&P and Russell.  Stay short in the Nasdaq.

The bottom two rows determine the signal.  Dynamic Day One trumps everything�"you always follow it.  When it's neutral, the Monthly Perpetual provides the direction.  Click here for a more in-depth explanation of the rules.

Daily CzarChart for August 8

The bottom row provides the direction of the bias at the open: long (L) or short (S).  When it's neutral, it will read zero (0).  Click here for a more in-depth explanation of the rules.

DISCLAIMER: It should not be assumed that the methods, techniques, or indicators presented on in this column will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on this column are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The author, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

Art Collins is the author of Market Beaters, a collection of interviews with renowned mechanical traders. He is currently working on a second volume. E-mail Art at artcollins@ameritech.net.