Time to Pay Attention

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!