We're approaching the monthly turnaround in the indexes.  According to our setup, Monday, or the closest trading day after May 7, would be when the calendar signal goes from long to short.

As we've stated, the reverse dates of the 7th (long to short) and 22nd (short to long) are optimized for a combination of best performance and equal duration on the long/short sides.  We should be expecting downward market pressure sometime around Monday, but obviously it could be a little earlier or later.  There's nothing magic about the exact precise date.  It's just a means of getting us positioned roughly in harmony with the cycles of market rallies around the end of a month, and declines more in the middle.  (As we've noted, the tendency is likely keyed to end-of-month window dressing.)

Two of the daily systems now disagree with the default trend.  The one that is neutral on the daily is the one we're currently short in a counter-trend trade.  (Which is a loser, but only one-third of an otherwise winning position we enjoyed for the day.  It's all a winners-losers numbers game, and so far, so good.)

The Biases

The bottom two rows determine the signal.  Dynamic Day One trumps everythingâ€"you always follow it.  When it's neutral, the Monthly Perpetual provides the direction.

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.