Market Timing comes down to having the right perspective; one can determine whether a market is topping or bottoming but one can’ determine the prcecise day the market is going to put in a top or a bottom. For example, our call in Oct 2007 was almost perfect. It worked out because we did not attempt to determine the exact day the market would hit an inflexion point.
We are expecting a pullback in the short-term time frames; this might or might not materialise as short-term timing is the most unpredictable period to deal with; if it does transpire risk takers and futures players can buy calls on the Dow, QQQQ’s, OEX and SPX indices; futures players can go long Dow or SP 500 futures contracts. Wait for at least a 600 point pull back from the current level. Market update Oct 16, 2007
This was sent out early on Oct 17th. The Dow moved up traded as high as 14012 and thus if you subtract 600 points from this level you get 13412. The Dow traded as low as 13407, and thus it traded within our suggested entry range.
Market Timing; offers illusions of wealth To Fools
The only area that has been somewhat tricky to predict has been the very short-term time frame. And indeed this to be expected as markets are nothing but a manifestation of insanity in real-time. As we have stated before stock market timing is at best tricky and at worst a ludicrous to a treacherous endeavour. We look for are signs of bottoming or topping action, and when we see this, we either bail out or start to look for new attractive entry points. For the masses, Market Timing will remain an illusory concept at best. It will offer the allure of wealth but is more likely to send the believers to the dog house.
The key to Market timing is not trying to determine the exact date
Our primary goal in market timing is to just warn our subscribers when we feel the markets are due for a pullback or a run-up.
We also look forward to pullbacks because in almost every case they are overdone, and they usually produce some very attractive buying opportunities. One day we expect that one of these stated pullbacks is going to be rather extreme in nature. Our motto is that disaster is nothing but opportunity waiting to hug or kiss you. Return the favour instead of slamming the door on it.
The word crisis in Chinese is composed of two characters-one represents danger and the other opportunity. Our take on this is that a crisis is dangerous for those who are desperately seeking safety. However, it is lucrative for the astute and patient investor. When one does this one discovers lot’s of lovely hidden gems just waiting to be picked up at incredibly low prices.
A crisis is an opportunity knocking in disguise
One thing most players have to remember today about market timing, is that the markets have become even more wicked and tricky than ever before. And the reason for this is that individuals as a whole today are more evil and treacherous than ever. Bottom seekers have to wait even longer before a bottom formation starts to manifest itself and vice versa. So if you are sitting there desperately waiting for something to happen the chances are that you will lose your patience and bail out before it occurs.
The best thing to do is to understand that nothing goes up or down all the time. Eventually, it will start to stabilise. Your job as an unbiased, objective observer is to sit and wait patiently for this situation to transpire. If you try to force something or push the markets into doing something the only one falling off the cliff will be you. The markets listen to no one, care about no one, respect no one and look to destroy everyone. The market is primarily a reflection of your deepest fears staring you right in the face and most people usually, blink when this happens and or look the other way.
Desperation leads to losses
How many times have you seen traders get desperate or lose their mind or rant and rave when a stock or an index is doing nothing but just moving sideways. Countless times. Market timing? What have they gained other than increasing their blood pressure and overall stress?
We at TI have long decided that to try to time a specific bottom or top is like trying to hit the bull’s eye while being blindfolded. We look for is a bottoming process or a topping process. And then we look for the psychological factors to confirm that we are indeed close to a bottom or top.
We either look for signs of greed or fear and when we see this, we take action. That’s how we were able to buy palladium initially in the 140-180 ranges, Silver bullion in the 4 dollar ranges, Gold in the 300 dollar ranges. We also got into Oil stocks when oil was trading well below 35 dollars a barrel, uranium stocks before the main move up started (here we jumped in and out of several 100% plus winners), and the list goes on. Using this same technique, we warned our subscribers of the housing disaster in late 2005, the Gold top in 2011, the Euro Top in 201, etc.
We looking for Bottoming or Topping signs
Most of the time we did not get in at the exact bottom or top but usually jumped in a bit too early and jumped out a bit too early, but we would rather be in and out early than late, and get killed in the process, market timing is the key. Look at the chaps that refused to listen and held onto their real estate. Today they would give anything to go back to 2004 and 2005 and be able to sell them at or close to the top. Now, these very same geniuses are going to have to wait maybe 9-11 years if not more before prices go back to what they used to be.
You don’t need to be rich to make money, but you do need to have the mindset of the wealthy to do so. What do we mean by this? Usually, wealthy individuals are not desperate to make money; the reason being that they already have enough to live well on, and so anything extra is a bonus.
Riches come to those who seek it & poverty to those who chase it
Because they are relaxed and not in a rush; that’s what needs to be learned by most novice traders. Do not rush, do not push for results, find an opportunity and let opportunity do the work for you. In the interim read a few good books and take the time to study yourself. Point and case when we first recommended palladium in the 140-180 ranges; it did nothing for a long time after we got in.
However, when it finally started to move it moved like a rocket. And in less than one year it had gone from under 180 to over 420 dollars. Was it not better to simply buy and wait after the main investment criteria were fulfilled. It experienced a severe correction, was putting in a bottom formation and most importantly the masses were ignoring it? In fact, almost no one was talking about it in late 2004 to early 2005.
Wealthy Mindset is Key to Success
It’s far more important to have the mindset of the wealthy and to attempt to vault from poverty into riches. Is it the money that makes you happy or the perception that you have money? Look at it this way if you were locked up in some place in a third world country with almost no money to spare and just barely enough food to eat. Would you then not consider yourself rich if you were given a simple job, a car, a house and a computer. The funny thins is that most people already have this and much more; the sad part is that there are a lot of people in these 3rd world countries who are struggling to survive on under a dollar a day.
Keep in mind the saying that “misery loves company” to which we added “and stupidity simply demands it”. Why don’t we say happiness loves company or intelligence demands it because it’s not true? Individuals usually do not like winners they start to get jealous when someone talks about winning or they feel upset when someone is unusually happy. The reason is simple they are envious because they would like to be like this person. But they do not know how to do this, correction, they do know how but they don’t want to try. Which brings us to another TI saying “life is not bad or good, life just is; it’s our perceptions that oscillate from bad to good”.
Riches just like happiness are a state of mind
It’s in our capacity as humans to change our perceptions and in doing so immensely improve the state of our lives, yet most choose to drivel in sorrow and misery. Opportunity is forever knocking but most people forget to open the door in time, and when they do open it they are usually waving goodbye instead of saying hello.
Every disaster, even painful situations always brings forth incredible opportunities. Most people fail to see it because they have been trained to focus on pain and misery. What is even sadder is that they concentrate on this pain and misery and do nothing to alleviate it. If you are going to focus on this area for heaven’s sake do something about it.
At the very least try to help yourself or those that are close to you but instead most people sit there like donkey’s, wailing and hoping that someone else takes pity on them and tries to help them. In this way, a lifetime is wasted in misery and pain and inadvertently trying to drag in as many other innocent bystanders as possible into this tragedy.
Do not chastise yourself for past mistakes but learn from them
And ask yourself why you did what you did and then write this down in your trading journal. The tragic part of most people’s lives is that they can dedicate so much time preparing themselves for a particular career, etc. However, they spend a tiny amount of time trying to get a better understanding of themselves and how the mass mindset operates. In fact, it can be stated that most people live and die without really knowing who they are and what they want.
People are born happy and usually die miserably as they have forgotten all the very basic tenets of what happiness is all about. Remember the times as a child and young adult when you could laugh at almost anything and life was to some extent a joy. Now look at where most people are; they are sloughing away to pay for things they don’t really need. For example, vacationing at some expensive resort. Just because it has some sand and unlimited food does not mean it’s not a prison. You have physically and mentally restricted your movements and the worst part is that you have done this voluntarily.
Give the Mind a break and take a vacation
How can staying in such a prison truly be a vacation? The masses have found a way to lock themselves up somewhere out of their own will. A vacation is not a place where you lock yourself up but open yourself up to new experiences. A vacation is where you take your mind away also and not just your body. To achieve this you have to give it something new, something to look forward too. For example, visiting a strange country; take in the sights and mingle with the natives. Avoid resorts if possible and spend most of your time outside.
When on vacation spend as little time as possible at the Hotel
You should only use the hotel to shower and for a good nights sleep. For the most part you should be out and about, interacting with the people, taking in the new sights, savouring the new food. If you do this not only will you have a real vacation but you will immediately open your mind to new possibilities. And that is what investing is all about, the opening of the mind to new possibilities.
Go back to that moment in time when as a child you experienced unadulterated fun or pleasure. Ask yourself what made the moment wonderful. In most cases, it was simple things that money could never buy. Perhaps it was a lovely picnic or a drive down in the countryside on a nice sunny day with a loved one or even just alone. Or maybe trying some new tasty dish, spending time with good friends and so on. Now notice that as an older adult if and when you have one of these moments of happiness how touched you are by them. You incredibly good when it happens and when it’s over you long for it again. However, you never try to dig down to ask yourself what was it that brought it about in the first place.
Be yourself and live in the moment
The answer is very simple; when you stop acting, stop pretending and just allow yourself to be who you really are without the disguises, the masks, the pretences and so forth you put yourself into a position where a ray of light can finally break through the gloom. It’s not hard to have a good time it’s just hard to see that it’s so easy to do so. This brings us to another TI saying; “life’s simplicity is what makes it so complex” stop trying to learn how to live a better life and just start to. Tomorrow begins today for tomorrow never really comes. Was not today the tomorrow you worried so desperately about yesterday.
Would it not have been better if today could have been the tomorrow you smiled about and looked forward to yesterday? We could speak at length on this topic and probably fill a book with all the points we could make on it; sadly we do not have the time to undertake such a massive endeavour on such short notice. The main thing to remember is that happiness is a state of mind. And as my late father Solon Palha used to say “happiness is a mind in peace and hell a mind in pieces”.
Psychology is one of the oldest sciences out there
It’s just that for a long time it existed under different names the primary one being philosophy. As they say history repeats itself over and over again and the past is actually a window into the future. One good book that should be compulsory reading for all traders is a book titled “Michel de Montaigne – The complete essays”. You can pick this up for as little as 10 dollars from Amazon. This Gentleman was born in the 1500’s and his writings display an incredible.