Hey! Well, it’s time for another blog post. I was sort of
hoping that my next post was going to be in January but obviously, no such
luck. I enjoy writing an entry once per year, that suggest that my market timing
operation is actively filtering out most of the noise. I have seen several tops and bottoms over the
years, just as you have. Remember the bottom of 2009? the top of 2007? The 2000
top and the 2002 bottom? I saw them and called them all.
Major bottoms and major tops all have somethings in common and
the markets want you to know about it and they use what I call the language of
the markets. Markets speak a language all their own and if you can understand
what it’s telling you, then you know that the market tells you what it wants to
do. Buy me! Sell me! It’s that code that
you have to decipher.
Any freely traded market speaks this code or language. Buy
me! Sell me! No time frame is an exception. To that end, if the market is not
telling you to buy or sell then by its silence it’s telling you to stay your
current course. It may take a dip here and there, it may pop here and there but
you have to be able to ignore the noise and concentrate on the message.
This market, in my understanding of its language is telling
me it’s time to divest myself of stock.
Remember, there is only one vehicle that we as retail
investors should be invested in at any given time. That is either no-load
mutual funds of stocks, bonds or cash. One of these 3 will general outperform
the other 2 during certain economic conditions.
Famed market wizard and trader, Jesse Livermore once said
“Profits always take care of themselves but losses never do”. It is your responsibility
to make sure that a small loss does not turn into a large loss.
As of this writing, the Wilshire 5000 which is an index that
represents the entire U.S. stock market, has returned an approximate negative
4%. In my timing operation I try to avoid noise and only pay attention to what
presents itself as a potential and substantial retracement or drawdown.
The Dow is showing a return of negative 3%, down from a high
of positive 9% earlier this year which basically means you lost all of your 9%
gain from 2018 and then you lost 3% of the coin you stacked up in 2017.
What am I going to do, you ask? I will as soon as possible,
get flat the stock market. I will move 100% of my long term invest money from
stocks and into a no-load, money market mutual fund.
Using the Dow as my benchmark, if I’m wrong, then I’m wrong
for about 9%. If I’m right I could be right for 40, 50, 75%. A small price to
pay so I gotta take the shot. If you
would like to know exactly how I make my calls or how to make the play, just ask
me.
That’s all for now, I’m not telling you what to do, I’m
telling you what I’m doing. I’ll post again when it becomes necessary.
Happy Holidays!
