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If the S&P was to go way up and give a buy signal then way down the next day give a sell signal. If it was to trade like that everyday. Then it wouldn't work. At that point you would have to tweak it. But chances of that happening over the long term is extremely doubtful.
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The system is based on the fact that the S&P will move in a certain direction for days. Either up or down. Ether way you out perform the market. The only time the system will not work is in short term periods where the market is way up one day and then way down the next.