We ran the algorithm on the S&P 500 cash index from January 2013. The historical trading pattern it picked up provided a sell signal near the start of the sell-off on Thursday, March 13. We would avoid taking positions in new longs until the selling pattern subsides, or the S&P trades above 1870. Shorts should target the 180Day Weighted Moving Average to take profits.
In the chart below, Green arrows are buy signals, Orange arrows are Sells. Green dashed lines are profitable trades.
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