Market Timing Research

GE has caught the world’s notice … This past week, GE’s CEO Jeff Immelt gave an optimistic 2011 growth forecast for the firm after so many struggles. The global economic crisis, he said, has helped force GE to get back on track with its core businesses. Immelt confirmed one of our primary thesis points: China will be one of its key areas for growth. You should look at all your stocks and evaluate who is doing what in China, India and Brazil and well as the upcoming N-11 countries and African frontier markets, for these are the future. Long term grwoth and investment opportunities are in THESE markets, not the US.

Buffett and GE go back a long way because in the 2008 market collapse Buffett provided $3 billion to GE in return for preferred stock and warrants to buy $3 billion in GE common shares. GE’s stock hasn’t shown a dramatic recovery, and now the company is reporting that 2011 finally looks rosy. But as to the stock price…check the seasonals.

This does not mean that this will come true because a roraring bull can throw all these projections aside. However, you should be ready. Furthermore, whatever happens, Spring will definitely be a great time to pick up shares if the seasonal holds true. That’s what seasonals help you predict.

Our Dow Jones newsletter just went out and inside was a tiny analysis on the Semiconductor sector.

Semiconductor stocks have made a killing since September this year. I recently lightened my positions because of the following chart, and will be looking to re-enter at some corrective lows either this month or January to take advantage of a dual seasonal/cycles top expected in March 2011.

Yes, both seasonals and cycles, which are independent of each other as long as the cycles lengths used in analysis are substantially different than 365 days, suggest a March high. But there are several corrections between now and then, and the current dip is right along with the seasonals, and helped me preserve my profits.

Let’s take a look at the SOX seasonal chart (you can play this with ultra-leveraged SOXL):

If you think the recession will continue into 2011, and if you want to preserve your wealth and even get richer, this may be the most important article you read all year.

You probably already know that we expect inflation to roar in 2011 to 2013 because of QE2. The stock market may even collapse, too, though the cycles show that possibility happening only near mid-2011. In any case, to make money you have to know where all the smart money goes, and the smart money bets on macro world trends. It bets big time on those trends, so what you are about to see is the best synopsis of those trends not just for next year but for 10 years into the future. This information might help you retire if you play it right. We always take those trends, put the seasonals on top of them, and then have perfect entry points even better than the Wall Street guys.

Already commodity prices have risen this year but the Fed won’t recognize this because it isn’t “core inflation.” Furthermore, the secular bull market in commodities has already made a lot of people rich, such as Jimmy Rogers who we often cite, and there are certain stocks and ETFs we mention in our newsletters that take advantage of these trends. In any case, these are people who put their own money on the line instead of government officials who have been wrong about every major financial bubble so far.

In the last five months alone, people have made up to 337% on commodity related trades, such as rare earths and strategic metals (see our November issue), WITHOUT even using options or leverage of any kind by betting on inflationary commodity price rises. This is where the money is right now. Today, I have a killer video showing you exactly where to find the highest returns:

How to Get Rich in 2011 Using the Macro View Video

It’s by John Thomas. He runs one of the hottest hedge funds in the world right now. He’s breaking with Wall Street tradition and actually helping main street traders make serious money. He’s published 49 free trade recommendations in the last 5 months. 48 have been winners. John is not your average trader, either. Wall Street Titans like Paul Tudor Jones and George Soros have hired him to consult with their hedge funds. He founded Wall Street’s first-ever dedicated international hedge-fund. And right now, today, he’s one of the top-performing hedge fund traders in the world, based on performance.

This video he put together for traders like you is getting amazingly positive feedback. Check it out now because it explains what you can expect to see in the world over the next few years, and where the “Vampire Squid” Goldman Sachs and other large firms are going to be making their monies. It is purely educational so you need to know this info to preserve your money and make money. It’s not in cd interest rates, that’s for sure. The big deal is that this information, WHEN COMBINED WITH SEASONAL ANALYSIS PRODUCES KILLER TRADES. You always wanted to know what stocks or instruments to trade, and now you’ll know:

How to Get Rich in 2011 Using the Macro View Video

In this video, he reveals: * The 3 hottest stock markets in the world * The specific commodity sectors where you can make the most money * Which little known markets are up 100% in 12 months – with bigger moves still ahead * Hard asset primer for traders * Doomed commodities to avoid like the plague * And much, much more

I recommend you watch it now if you are interested in preserving your wealth and making it grow through the Great Recession 2011. It’s 100% free and 100% content. No sales pitch.

How to Get Rich in 2011 Using the Macro View Video

This is the best advice we can give you for making money over the long term. Find out where the hedge funds will put their money, and ride that wave of cash to profits. Even during the 2011 recession you can get wealthier, and this explains how to do it. Probably the best expert we have talked about all year. When you put seasonal entry points and triggers on top of information like this it is just killer, Killer, KILLER.

And so the first month of QE2 is over with interest rates rising a bit and the stock market dropping for the month. However, in all likelihood QE2 will help raise the markets just a little bit more, and seasonals suggest that December will be an upwards month as good news floods in about internet sales and the solution of other worldwide crises.

Cycles analyst Charles Nenner of the Charles Nenner Research Institute had predicted that December would be a short term cycles low in the stock market, but it may be that today’s rally shows the kick-off has started earlier. Nenner also feels that we will see a collapse in equity prices in mid-2011, possibly due to deflationary forces or other reasons, and then eventually DOW 5000. Elliottwave technician Robert Prechter ultimately sees DOW 1000.

We don’t have any crystal balls but do agree that the markets will be testing the 2008-2009 lows next year, with a bottom in either 2012 or 2015.

But what does that mean for trading? Nothing at all using our methods. We pick stocks that have a fundamental story, apply the seasonals on top of them, and then make judicious trades. Let me provide an example to show you what I’m talking about, but first the S&P500 forecast:

Here’s what I mean about stories…

Many macro players are citing the fact that world growth will deplete our resources, and therefore there will be demand for more COAL and NUCLEAR energy. Okay, let’s check the seasonals for PKOL, a global coal ETF and NLR, a nuclear power ETF. We have a fundamental view, we want to get in, but we are worried about the timing. Should we get in now?

Let’s do our research …

Form these two charts, you can see that there is not a lot of past history to build accurate seasonals to go on. With the little data we have, December looks like it could see a continuation of the push upwards, but then there may be a drop in prices come January. If you are a short term trader you have the potential of a December pop, if it’s in your outlook, but for a long term investor you might want to wait and see whether there is a January correction so you can get itno a position (or add to one).

Since we would be long term players here if we are following long term fundamental analysis, we would be looking to get in on a drawback, so the charts would behoove you to wait. If we had 5 years of data we would be able to be more definitive but this is the best we can do with so little data.

If you had a lot of data you’d say: “I’m bullish on Stock XYZ. The reasons are –, — and –. I want to get in. Let me see if the seasonal says now is a good time or whether I should wait.” If you are already in, late December I would raise my stops or possibly sell calls. It would depend on the strategies you are used to using and your view of the market at that point in time.

So even though there are only two years of data, from so little seasonal data you still get an inkling as to how to use seasonals to help with your trading and investing. But once again, you want 5 years of data or more.

If you are following some options hotline, ALWAYS screen the trade past the seasonals and I’m sure you’ll cut down on your losers and find better places to take profits on parts of your position. You could make a living trading options off the seasonals and some momentum indicator alone that triggered trades to look at. This is just another way for using seasonal analysis to cut your risks.