Market Timing 06 (May 18 - Oct 22)

Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Sat Feb 16, 2019 7:21 pm

The Tragic Cost of Market Volatility

According to Lipper data, investors moved a staggering $190 billion into money market funds (cash) in Q4 2018. The last time investors fled risk assets in such large numbers was during the 2008 global financial crisis.

With the benefit of hindsight, we know that the decision to go to cash in Q4 2018 likely came at a steep - what I call 'tragic' - cost.

Since Christmas Eve, when the S&P 500 touched bear market territory with a ~20% decline from September highs, the market has rallied strongly: up +12.05% through last Friday, February 8. January 2019 delivered the best rally to start a new year in over 30 years.

But for investors who went to cash in Q4, I wonder how many of them sold when the market was at or near the bottom, and I also wonder how many investors either
1) remain on the sidelines today as a result; or
2) got back into stocks only partway through the current rally.
Neither outcome seems desirable to me.

But there's still more to consider when it comes to the current rally, the biggest being the possibility that investors who missed the upsurge may not get much of a second chance.

This bull market is now in its 10th year, and all signs point to overall slower global economic growth and fading corporate earnings growth.

Q1 2019 is already looking like it could be a flattish period for earnings growth, and full-year 2019 growth is expected in the mid-single digits - a far cry from 2018.

Since 1926, stocks rose an average of +34% before dividends in the 12-month period following a correction (when stocks fall 10% - 20%).

After bear markets, when stocks decline 20% or worse from a recent peak, the next 12-months average 47%.

The takeaway from this data is one that we've known all along - equity markets tend to rebound just as quickly as they decline, often whipsawing investors who try to time entry and exit.

Source: Zack's
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Fri Apr 19, 2019 8:00 am

Goldman figures out best times to enter and exit earnings trades

Over the past decade, liquidity has risen before results, then dropped on the day itself as volatility increases and quants stay away.

"The five days preceding the earnings day offer the most attractive days to access liquidity in a single stock”.

"Pre-position for earnings moves, but wait until four to six days after to exit.”


Source: The Star

https://www.thestar.com.my/business/bus ... gpE7mIw.99
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Wed Jun 05, 2019 9:28 am

Beware The Bounce Or Buy The Dip?

Source: TTR

http://www.thetradingreport.com/2019/06 ... y-the-dip/
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Sun Jun 09, 2019 8:46 pm

The Market May Be Hitting the Dreaded 'Triple Top'—a Red Flag to Investors

“First of all, the long term uptrend line remains intact (each high has been higher than the previous one), with the exception of last December, that I view as a real anomaly exacerbated by computer trading.”


Source: Fortune

https://finance.yahoo.com/news/market-m ... 16556.html
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Mon Dec 30, 2019 10:57 am

A 10% to 20% pullback could strike stocks early next year, long-time bull Ed Yardeni warns

by Stephanie Landsman

“I’ve been shooting for 3,500 for the S&P 500 by the end of next year and we’re getting closer. Faster than I would have expected.”

And the consequences could be downright painful.

″[A] 10% to 20% [correction] would be quite possible if this market gets to 3,500 well ahead of my schedule,” he said.

“What I’m worrying about is nobody is worried anymore.”

Pick up stocks, particularly in the technology space, at a better value.


Source: CNBC

https://www.cnbc.com/2019/12/29/record- ... KW,3QUKQ,1
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Re: Market Timing 06 (May 18 - Dec 21)

Postby winston » Tue Feb 25, 2020 1:52 pm

Here’s a way to boost your chances of missing the stock market’s worst

By Mark Hulbert

Sidestepping the best and worst trading days beats the market with less risk

The opponent of market timing argued that a market timer who misses just a handful of the best days in the U.S. stock market will significantly lag a buy-and-hold investor — perhaps even losing money. That is correct, but only as a matter of historical fact.

You also could focus on avoiding the 50 worst days. As you can see from the accompanying chart, you could have nearly doubled your return since 1928 by being out of the market on the 50 worst days, boosting your return to 10.42% annualized from 5.83%.

Now, what about a market timer who missed both the 50 best- and the 50 worst days? In that case, the annualized return since 1928 would have been 5.99%, essentially equivalent to the 5.83% of buying and holding — with a lot less volatility. That’s not a bad trade-off in terms of risk-adjusted performance.


Source: Market Watch

https://www.marketwatch.com/story/heres ... yptr=yahoo
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Re: Market Timing 06 (May 18 - Dec 21)

Postby winston » Wed Mar 18, 2020 1:45 pm

Stocks aren’t bargains yet, but a buying opportunity will come. Here’s how you’ll know it’s here

By Mark Hulbert

Four key ratios show valuation picture is a lot better than it was a month ago

1. q-ratio. It is calculated by dividing market value by the replacement cost of assets.
2. Price/Book ratio
3. Cyclically adjusted price/earnings ratio (based on the average of 10-year inflation-adjusted earnings per share
4. Buffett Indicator (the ratio of GDP to the total value of all stocks).


Source: Market Watch

https://www.marketwatch.com/story/stock ... yptr=yahoo
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Re: Market Timing 06 (May 18 - Dec 21)

Postby winston » Fri Mar 20, 2020 1:51 pm

Coronavirus Stock Market Crash: Here's How To Spot A Market Bottom

Signs of institutional selling are seen at market tops, signs of institutional buying are seen at market bottoms.

A follow-through day is the key bottoming signal. Follow-throughs don't have a 100% success rate, but they have been seen at every single market bottom, so it's important to learn how to recognize them.

After a prolonged stock market downturn, look for the first up day from an index low. That's the start of a rally attempt.

Usually the index bounces from a sharp drop and closes near session highs, although closing in the upper half of the day's trading range is acceptable.

After that, look for a big percentage gain in higher volume than the previous session on Day 4 or later of the rally attempt.


Source: IBD

https://www.investors.com/how-to-invest ... yptr=yahoo
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US - Market Direction 42 (May 19 - Dec 20)

Postby winston » Wed Apr 01, 2020 11:47 am

Why the market doesn’t have to plummet further amid coronavirus

by Joe Fahmy

The stock market is a discounting mechanism. It trades on what will happen 6-9 months from now.
1. Price Action
2. Negative Sentiment
3. Global Central Banks
4. History


Source: Yahoo Finance

https://finance.yahoo.com/news/why-the- ... 03096.html
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Re: Market Timing 06 (May 18 - Dec 21)

Postby winston » Fri Apr 03, 2020 7:59 am

Market Recovery: Sooner Than Most Expect

by Rida Morwa

Summary

Sentiment and positioning are exceptionally one sided.

Almost everybody thinks we will break the March lows.

Insiders continue buying equities at a record pace.

Since Feb. 24, 2020, we have had eight market openings with a gap of more than 3% lower. The total such 3% gap-down openings over the last 20 years is 19.


Source: Seeking Alpha

https://seekingalpha.com/article/433554 ... ent=link-0
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