Market Timing Research

Let me show you 6 stocks I went bearish on this morning after Factor Seasonal analysis last night. All I do is scan my watchlists for MACD signals, pop the stocks that trigger into my trusty factor seasonal program (you get a boiled down version of the program for PCs with a subscription to our Seasonal Cash Flow Super Package) and presto:

Every month our chart packed newsletters show you, IN PLAIN AND CLEAR PICTURES, the only stocks you need to be watching for the SAFEST bullish and bearish trades because those trends are lined up with the Factor seasonals. No more ritzy expensive financial newsletters with lots of verbiage that don’t make you any money. We’re down to earth and all we care about is trading or investment profits. Just look at the chart forecasts of each stock, and decide whether to get in or stay out.

No one else enables you to do this! No one, nobody, nada, zippo!

You’re bearish? Fine. Minimize your risks and increase your chances of success by only shorting/buying puts on stocks with a negative seasonal trend to boot. If the makret tanks you’ll have two forces working for you — the market’s downward pull and EXTRA downward pressure due to the stock’s declining seasonal tendency. HERE’S THE KICKER: That way if you’re wrong on the market timing because of volatility swings, the stock’s negative tendency will still help you pull through and make money.

It’s all about making money. It’s not abouit having a “vioew of the market” and getting on Yahoo Finance. It’s about stock selection that will make you money. Short term or longer term, this beats anything out there. Cramer can’t do any better than this.

And remember … if a stock isn’t following its seasonal tendency but is ultra bullish in a big way despite the underlying seasonal chart, check the volume for money pouring in because you may have found a ten bagger! (Of course it works onthe flip side, too — what a great way to take the temperature of the patient)

For a bullish stance, invest in those shares that have a bulish tendency this time of year, and are supported by the Factor Seasonals. What could be easier?

Nothing!

That’s why people are turning to the logic of the Factor Seasonal approach to trading and investing.

You’d get an appraisal before you’d buy something expensive, wouldn’t you? That’s what a Factor Seasonal chart is — a clear appraisal of the stock’s projected worth.

In terms of seasonal timing, the Dow Jones Industrial Average is now starting to correlate short term to its Bear Market Factor Seasonal. China announces that it will raise its exchange rate, Asian shares go crazy upwards, and the Dow does what???? It falls!

Take a look at the best seasonal projection chart, which is showing a possible bottom mid-July (exactly what the Foundation for the Study of Cyles is predicting):

If you want to be a good stock picker, right now the bet is on the downside for the next few days, at the minimum. That’s the best CURRENT forecast that the seasonals can give you. The Factor seasonal charts allow you to make better EWT counts and forecasts than anything else out there. That’s why the Elliottwave guys take their timing cues from us!

Of course with our new free software, which you can grab your hands on by taking advantage of our special offer of the Seasonal Cash Flow System, you can be creating seasonals for any stock you want — and you won’t even need a data feed. You won’t have our full software that we use to create all our factor seasonals, but once you see the stocks we pick in our newsletters, you can keep an eye on them (or any other shares you have) to keep up with the latest market timing.

For instance I just liquidated my portfolio today for a 3% gain on the entire account over the last few days, and I wasn’t anywhere near full invested. I just picked the stocks with the strongest factor seasonal trends upwards, loaded up on those stocks when they crossed my trigger points last week, and then liquidated today when my system triggered again. Without the Factor Seasonal software, I would never have known which shares would be among the best performing.

That’s how I do it, but you can use your own method with our software. Our newsletters do the extensive research to tell you which stocks to watch (you can’t possibly watch 10,000 shares yourself) and then you use whatever timing method you feel the most comfortable with. If you’re an active trader, this is the best way to pick the shares that are not just moving (all stock screens do that) but which ARE LIKELY TO CONTNUE MOVING ON INTO THE NEAR FUTURE. Don’t just bet on momentum alone, bet on the seasonal trend, and the fundamental trend behind the seasonal tend … the factor seasonal trend!

Yesterday BP prices rose. Why? Look at the seasonal — it’s the traditional turning period. Last night President Obama made a speech that BP must set aside money to pay workers and businesses affected by the disaster. He was very careful in his language – as careful as Ex-President Clinton was in selecting his verb tenses when talking about not having sex with Monica Lewinsky – to ONLY mention “businesses and workers.” Now that the news is out, let’s look at the seasonal so you can follow it …

Here’s the latest Dow Forecast …

Dow Jones Against its Best Projected Seasonal Pattern

Last Friday many stocks had bullish MACD crossovers. That includes 23 NASDAQ100 stocks and 18 S&P100 stocks.

After passing them through our factor seasonal filters, a smaller subset of stocks was left for consideration. These include USB, GILD, FCX, MS, RTN, DELL, FAST, ERTS, MXIM, GENZ, CELG, GILD. That’s 6 S&P100 stocks and 7 NASDAQ100 stocks. So you can see that the factor seasonal approach really cuts down on trades to look at, and THAT’s VALUABLE!

Of those passing yet a further set of filters, three stocks were left: RTN, FAST and CELG. 41 stocks were reduced to 3 (USB is a semi-possible, which would make 4). Here are the charts:

Raytheon – Aerospace and Defense

Fastenal Company – Materials and Construction”

CELG – Drugs and Biotech

Market timers love charts, and every now and then they like to put up the decennial cycle, which is finding the stock trading pattern for taking every 10th year. Well, we like to put all such patterns against our best projection line. In our newsletters, on the blog, everywhere we said that the end of May would probably see a bump UP in prices due to seasonals, factor seasonals and now the decennial cycle …

We’ve just completed a major new study here at Market Timing Research on volume cycles in conjunction with seasonal cycles. Using our same proprietary method for developing price seasonals, we did the same analysis for yearly volume to see if volume does indeed go up as prices go up, and down as prices drop, and to see if it could explain volatility in certain times of the year. Sure enough it does, and when there are periods of disconnect between volume and price, this may bespeak to an insecure market or periods of volatility that can be used to your benefit. The following charts shows what we’re talking about.

To our knowledge, no one has ever done this type of analysis previously or produced this type of chart before. As usual, we are market timer firsts. The stock charts suggests we should see a sharp spike UP in the market around now, though that would have to be confirmed with the lunar seasonal.

The other factor seasonal we’d like to highlight is the DJI typical price pattern in years when the government is doing everything possible to provide easy money, as the market has about an 80% correlation with this trend. You can see the forward expectations if this pattern is to hold, once again forecasting a near term bump UP against all expectations.

Naturally you can find lots of individual stocks obeying their seasonal tendencies in our monthly newsletters. Just grab a sample subscription and see for yourself all the money you could be making with this insider information.

The Germans have banned short selling, fearing for the Euro. If the Euro fails, the European union fails, or so goes the theory. France already has a ban or short selling, but stocks have fallen anyway, as they always do when things look bad.

Well, what does that mean for stocks … or for anything that has to do with preserving our capital and making money.The only thing we can do is look at the seasonals, which suggest a fall in the summer months as we have been trumpeting in our newsletters.

Market timers , We’re still expecting a market turnaround at the end of this month, starting around the 24th. The market is currently following the 4 year election cycle better than any other factor seasonal, so here it is for a preview…

Presidential Cycle Seasonal Proejction

The charts this month has lots of opportunities. ATT looks good, CAT looks bad. CVX looks a bit depressed from where it should be, Citibank is on track. JPM seems like it’s ready to pop … If you are expecting bad times ahead, you’d pay attention to Disney, Walmart, Caterpillar and Dupont, and put a MACD trigger on the downward seasonal expectations. Seasonally those stocks go down; if there is a market crash, that decline on top of seasonal expectations should lead to some nice trading profits. Here’s a courtesy look at the recent DJIA newsletter with pure price projections. This type of inside information is how traders make money.

May DJIA Newsletter

Word just came out that the Wall Street banks, including Morgan Stanley, just had 63 straight days of trading profits. That’s right, not a single day in the previous quarter where their traders lost money. We also now hear that the government is going to probe those firms in a possible criminal investigation. Someone is out for blood.

We looked at Goldman Sachs previously, so how does Morgan Stanley fare? Let’s look at the factor seasonal charts…

The seasonal chart here suggests that we wait for a MACD upturn for a quick rebound in the stock, perhaps a chance for trading profits. But what about during bear markets?

Although we are expecting a severe downturn in July-August, Morgan usually holds steady during market downturns during that period. If it was a normal weakness we were expecting, the seasonal suggests Morgan would be holding its value and thus a safer BUY than we would consider without having any such information. But sine we are expecting a big drop/weakness in August, this typical chart may not hold.

In any case, you now see the power of seasonals in helping to judge a stock for trading purposes. We offer chart books of past stock performance in ALL sorts of trading environments — bull/bear markets, increasing/decreasing inflation rates, increasing/decreasing interest rates, economic expansions/recession, Democrats/Republicans in office, and so on. They are invaluable for both the Technical analyst doing market timing and fundamental trader ho is focusing on earnings and P/E ratios.

Nouriel Roubini just said that he expects the US recovery to slow in the second half of the year. I agree. We do lots of cycles work and have plenty of forecasting techniques at our disposal. Here’s what we expect.

A weak July and TERRIBLE August.
A prolonged decline starting in December
and running on through to February of next year.
Wicked bad.

That’s from cycles and seasonals.

Everyone asks for the reasons why when we talk cycles and here they are …

What drove GDP growth over the last year was inventory adjustments, which called for restocking and thus manufacturing output to increase. Basically, upon the 2007-2008 stock downturn and mention of recession/depression, companies cut inventories, laid of workers, and then last year they started replenishing them because they cut too much. That restocking is all done with now: inventories are replenished.

The question is, will consumers start buying again as they did in days of old, using Mr. Plastic? Doubtful. People have lost jobs, realize they have too much debt already, and as seen in the after effects of the 1929 great depression, are wary about using credit anymore. They are gun shy about using Mr. Visa and Amex.

What about the government stimulus package?

Roubini thinks the impact of the government’s stimulus on GDP growth will peak this quarter, and its contribution to growth will decline from here on in. John Mauldin did a piece awhile back showing that even if we added a ton of jobs every month, WHICH IS IMPOSSIBLE TO BEGIN WITH, it will still take us years to recover all the jobs we’ve lost since the start of the recession. The growth rate we need in GNP must be at historic highs, and that’s science fiction impossible unless we bump into some massive new economic paradigm from some invention that calls for massive Shumpeter destruction and creation, where the creation phase has to make a lot of money for everyone (or cut costs in a magnificent way).

And what jobs are you thinking of stimulating anyway when you start trumping that feel good catch phrase (“jobs stimulus”) designed to cheer the nation with rah, rah, rah? Sorry folks, the manufacturing jobs are gone, which is what you need in a nation because it’s usually only manufacturing that produces increasing margins per scale, meaning wealth. Finance does a little bit, but we killed that golden goose. Erik Reinert in How Rich Countries Got Rich surveyed the last 500 years of wealth creation and nations which became impoverished as well. How did they get rich? They went into increasing returns activities, namely manufacturing. Lose that and your wealth goes with it. The equation that mattered was:

(Increasing margins per scale) * (Inceasing demand for the goods) = Wealth

Countless English speaking jobs that don’t even require technical skills, as does manufacturing, have been outsourced to India and the Philippines, and quite a few IT jobs as well. These jobs are NOT coming back. Why would they since they are cheaper over there? Bartending and restaurant jobs will get a bump up for a short while along with other near minimum wage jobs that are service based, but “service based jobs” means their existence is dependent on good times and the use of credit. So with the expensive jobs going/gone and loss of the manufacturing base that used to pay for them, slowly wave goodbye to a premier national standing. You hate to hear that? I hate to write it. Go read Reinert.

I think it was John Bogle of Vanguard fame who warned that we’d have a long time period (a decade or more) of poor stock market returns and they have started. I didn’t believe him at the time, but it turned out to be true. Mauldin said the same thing in his last book, Bulls Eye Investing. With Europe in a frazzle ready to split at the seams, the likelihood is tilting toward more bad times ahead rather than good, so I side with ROubini and turn a deaf ear to Obama proclamations. Expect these coming periods as BAD times for the US Economy and thus stocks:

July-August 2010
Dec 2010-Feb 2011