For the past 20 years I have
been a student of the stock market. For
the last 10 years or so in particular it has been my passion and focus to
develop an accurate, robust long term timing method; the primary purpose being
to help individuals decide when they may want to be invested in stocks or
mutual funds in their retirement plan and when to exit or move 100% into
cash. If a method like this exists, the
value cannot be overstated. I have spoken
to countless individuals whose retirement plans were decimated in the last two
major bear markets. Many are just seeing
their equity recover back to the same level as in early 2000. What if they had the aid of a good long term
timing method to help them avoid these gut wrenching losses? What would their results be today?
I am happy to say that I have
developed an accurate, robust long term timing method which has been back
tested over several decades of data.
This model is NOT simply a computer algorithm which spits out mechanical
buy and sell signals but is rather a rule based approach based on decades of
experience looking at price charts and the most important indicators that
confirm long term trend changes. Without
getting into too much detail following are the factors that I look at to determine
the buy and exit signals:
1) Price and momentum analysis of Quarterly chart.
2) Analysis of price swings based on daily price data.
3) Analysis of significant support and resistance levels.
4) Analysis of sentiment.
Below is the most recent
quarterly chart of the SPY showing the historical buy and exit signals.As you can see the method had only one losing
signal but more importantly never missed a major buy signal AND had you out of
the market well before the major drops occurred.
Although I will update the blog weekly (typically Saturday morning), there may not be much commentary as the buy and exit signals are infrequent. In future posts I’ll get more into hedging techniques that can be very useful during intermediate term corrections during a bull market. If you have any questions or suggestions, please send me an email. Have a great holiday weekend!
