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Market Timing

Sunday, April 28 2019

After the big dip in December 2018, the S&P 500 (SPX) followed the "V-Bottom" all the way back up to hit the new high levels at about $2,940 this Friday.  See the Graph immediately below.

Along the way up, you can see that the SP500 "waffled" for about 5 weeks (2/25/19 - 3/39/19) before breaking above its upside resistance at $2815.

What happens next?  Read on...


From its resistance level at $2815, the SPX ran up to and closed on the current new high at around $2940.  Does the waffling start again?  Even it does, the market will eventually "break out" and move up or down from here. Yes, but which way will it go?

My opinion is that, waffling or not, the market (SPX) will "melt up" for the next 4-5 months, at least.  Of course, this new "run" does not have to be, and probably won't be, a smooth ride to get past the $3000-$3300 level. 

To stock investors, "melt up" is a term that investors use when the market goes up for no one reason, and maybe for no recognizable reason at all.  For example, economic indicators like interest rates, earnings, tariffs, etc., can be just "OK" but not great, and in spite of all of this, the market may go way up anyway (melts up) because investors continue to buy stocks instead of putting their money in bonds, precious metals, real estate, etc.  Therefore, since most investors HATE to be sitting on cash, stocks are the "lessor of all evils", and the bulls "push" stock prices up.

On the other side of this, "something unsettling" could come along (and it does not have to be something terrible) that could upset the upside trend, and send us into a big correction. 

MIPS navigates us through these nightmares with its hundreds of indicators and mathematical algorithms that it calculates each day to predict the market direction (which would take us 3-4 months to calculate ).  Stay tuned...

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

Posted by: Dr. G. Paul Distefano AT 06:22 pm   |  Permalink   |  Email
Sunday, April 07 2019

As you know and can see in the graph (or attachment) below, the S&P 500 Index has soared in a record pace from Dec 24, 2018 to where it is today.  In fact, the SP500 is now only about -1.5% below its "All-Time High".  As all know, the Index will most likely have a heck of a time trying to cross above this threshold (which is more like the "front-line" in hand-to-hand combat between bulls and bears).

Once the Index gets closer to the All-Time High, crazy things happen and they happen fast.  If the Index breaks above and holds for a week or so, the sky is the limit.  But, if the SP500 fails at that price level, all hell may break loose and lots of "investors" could lose big money fast.  Of course, the media pundits will tell us what is going on, but only after it happens !!!

I sure don't know what will happen in the very shout-term.  My gut is telling me that the market is headed up from here, but "my gut" is not enough.  And, regardless of what I think, I am depending upon MIPS to tell me what to do !!!   You should be doing the same...

Good Trading...

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

Posted by: Dr. G. Paul Distefano AT 08:09 pm   |  Permalink   |  Email
Thursday, April 04 2019

The market (S&P500) in 1Q’19 was a relatively unique ride to the upside; and some of its main accomplishments were:
   (1) completing the backside up-leg of a big V-Bottom,
   (2) breaking the last topside resistance on the wat to a new all-time high,
   (3) nearly breaking above its long-term trend, and
   (4) performing as one of the top eight first quarters in the last 40 years.

In 1Q’19, there were many reasons “planted” by the press and newsletters about the market stalling and running out of steam.  For example, the market took a big hit near the end on the quarter on the news that the yield curve had inverted (that is, the 3-month yield had surpassed the 10-year yield); and this is supposed to be an indicator that the USA is facing a recession.  The day that “news” came out, the market took a big dive as many traders (and quantitative models) got sucked in.  But, even though this “indicator” has a relatively good record at predicting recessions, these recessions are predicted to happen 6-24 months in the future, NOT now.  And, we all know that THIS short-term yield came from decisions made by the Fed, NOT the overall economy.

Right now, and in the near future, I believe that US companies will do well and continue to grow at rates much higher than the last half of the last decade.  And, when companies and their earning go up, their stock prices go up also.

The performances of MIPS3, MIPS4, and MIPS/Nitro models were all positive and this continued through 1Q’19 (see the graph for MIPS/Nitro below).  Note how Nitro avoided the big -13% dip at the end of 2018.

MIPS/Nitro Performance  (2018 – 1Q’19)
- see below
                                                   MIPS +7.5%                      SPY +5.2


Good Trading…


Paul Distefano, PhD

CEO / Founder
MIPS Timing Systems, LLC

Houston, TX


Posted by: Dr. G. Paul Distefano AT 09:58 pm   |  Permalink   |  Email

MIPS Timing Systems
P.O. Box 925214
Houston, TX  77292

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