Market Timing

This Blog is like a continuation of the Blog that we sent out almost two months ago (see below). The reason that we are adding this new material to the previous one is to show that the current market is still waffling and nothing significant has really changed (same old, same old) in spite of what the "news" says is happening. "The press" prints what sells, truth or not.  So, as you will see below, this market has been "flat" or "sideways" for almost two years now.

As you may or may not know, "sideways" markets are markets of uncertainty and/or fear (that is why they are called "consolidation patterns").  When some bad news comes out (truth or not), traders run for the hills. Then, when the bad news does not materialize, the same sellers come back buying and basically reverse their actions and fears. The main reason why most "dips" are "V-Shaped" is that the same traders that sold on the way down bought back in almost the same fashion as they sold (that is, same prices and dollar amounts).

All of the reasons from the previous email (seven of them) are still the main concerns for investors; but in reality, none may actually materialize soon.  In markets like this, little guys (like us) could suffer massive losses in markets going nowhere by getting whipsawed !!!

My personal opinion is that, without any REAL massive screw-ups (as in overdone tariffs by Trump/China or stupid unnecessary rate changes by the Fed, etc) this market will break out to the upside for at least the next six months, mainly because the US economy is still strong.  I can't remember a single "market crash" when corporate earinngs were high.  Of course, we do not follow what I think, we follow MIPS.  Stay tuned...


Here are the latest "Flat Markets"  Graphs ...

3rd Quarter of 2019 (SPY)
- see the last 4 failed attempts to break the Support Level to the downside

Last Six Months (S&P 500)
- plus/minus 3.5% trading range



Long-Term View
- all the way back to 1993
- are we now in a "topping" pattern, as in 2000 and 2008 ???

 

Performance - MIPS/Nitro vs SP500
- Last 12 months (MIPS is blue, SPY is red)                
  Results are about the same (both flat), but MIPS provided a "smoother ride" (thus helping us with our health)

Please notice that when the SPY took the big dip in 4Q'18 (-20%), MIPS was up +2% (as it most likely will be on the next "big crash").  This is what MIPS members are counting on by using MIPS.!!!

Good Trading...

Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems. LLC
Houston, TX

Well. today we got very close to an All-Time High with SPY (the SP 500 Index ETF).

The first graph below is a graph of the last few months with daily bars; and you can see that the SPY hit its All-Time High today, but bounced back a little (like hitting a Brick Wall).

However, the second graph with minute-by-minute bars today (9/12/19) is more telling in that it shows that the SPY hit or came very close to the All-TIme High four times, but bounced back on each and ended down.

This is a true representation of what "Resistance" means. Many believe that when a market approaches its All Times Highs from below there are millions of investors (not necessarily traders) that lived through the existing All-Time High when it happened and are very sore that they did not sell back then. Many of these swore to themselves that if or when the market hits that All-Time High again, they are going to sell.  For sure, it is highly possible that there are millions more sellers than there are buyers at many All-Time High levels. 

On the other hand, in up markets with strong fundamentals (high earnings, low unemployment, etc) there could be millions of buyers waiting for confirmation that the market is still an "up market". Nothing proves this more than the market breaking its All-Time High on the up side.

So, sit back and do what MIPS tells you to do (all MIPS models are Long now).

Daily Bars

Minute-by-Minute Bars
- the muted black background space on the right is "after hours"

Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems, LLC
Houston, TX

281-251-MIPS(6477)
www.mipstiming.com