I know, from firsthand experience and from feedback that I get from my subscribers, that the CycleProphet Investor Tools (Equity Forecaster, Equity Analyzer and Market Forecaster) are the best tools on the market at any price. But, just saying that doesn't make it so, I completely realize. As such, I asked our intrepid development team to run some blind studies on how our tools have done over the past three years when it comes to timing when to buy, when to sell, when to sell short and when to cover. Below, right, are the results.
You'll have to pardon me if I gush a bit with pride on just how significantly great the results of this analysis have turned out.
Currently, we have 5,343 stocks and ETFs in our database. The analysis covered the last three years, which as I know you know, has been, for the most part, a raging bull market. You would expect the results to be pretty good, but even I was surprised at just how good.
To put these stats in some kind of context, I had the programmers compare as many results as possible to a simple buy-and-hold strategy. After all, if the market has been going up for three years, a buy-and-hold strategy should be tough to beat. But, we did way better than just beat the buy-and-hold approach… we crushed it.
With CycleProphet's trade-timing signals, we saw nearly 10 times as many equities generate 500% or more in profit over the past 3 years; over 5 times as many equities generating 200% or more than buy-and-hold; over 3 times as many doublers (100% or more gainers) than the buy-and-hold crowd; and a staggering 99%+ of all the stocks in our database had positive returns over the past 3 years compared with only 79% of the buy-and-hold strategy… again… in a strong bull market.
It gets even better… Over 61% of all the blind trades made based on CycleProphet trade-timing signals were winning trades. Add to this that the average winning trade was well over twice the size of the average losing trade.
The stats team also worked up the results of the S&P 500 stocks and our Top 100 Stocks, just to show some different views of the performance. If you are not using Equity Analyzer's buy/sell signals to trade, you are missing out on a very powerful and very profitable tool.
Now… Just in case there is a skeptic in the audience (and you know who you are) and you are thinking, skeptically of course, that these incredible stats are in a raging bull market… so what happens in a raging bear market?
Of course, 2011 wasn't exactly a bull market with the S&P dropping nearly 18% between April and August of that year… but it still wasn't an 'official' bear market. Keep this in mind… In a bear market, the buy-and-hold strategy will be decimated in most positions other than inverse ETFs. However, my system will take advantage of shorting opportunities PLUS the inverse ETFs. I would expect my system to produce even better results in a comparison between trade-timing and buy-and-hold, in a bear market.
We will likely get the opportunity to test that theory in the future, but I am convinced the theory will be proven to be accurate. At this point, we will just have to wait for a bear market to see how my tools perform, but since my tools do not care what direction the market is moving as it makes buy/sell/short/cover decisions based purely on trend analysis, I do not expect the overall performance to be much different; again, other than in comparison to a buy-and-hold strategy, which we should significantly outperform.
My Take on the Market…
Quote worth Quoting Again
"You cannot bring prosperity by discouraging thrift. You cannot help small men by tearing down big men. You cannot strengthen the weak by weakening the strong. You cannot lift the wage earner by pulling down the wage payer. You cannot help the poor man by destroying the rich. You cannot keep out of trouble by spending more than your income. You cannot further brotherhood of men by inciting class hatred. You cannot establish security on borrowed money. You cannot build character and courage by taking away man's initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves."…
With the historically worst month of the year coming up (September) and all the machinations regarding the way overblown saga of on-again-off-again Fed tapering; not to mention the market roiling potential of employment numbers (or lack thereof) and a myriad of other domestic and geo-political events, this coming September just might be one of those months you're going to wish you had skipped.
So… if you said, "I think I'll take my profits and sit on them for the month of September!", I'm not sure I would argue with you…
But, I don't plan to sit out September… not unless my exit rules are triggered; and, they certainly could be triggered.
In my Signal Investor portfolio, I am about 96% invested and with the neutral (nearly equal number of bullish and bearish indicators), I don't believe I want to replace that last 4% with anything but cash.
In my money management long/short portfolio, I am a little over 50% invested. My only short position is TBT, which is a short play on bonds. It would not surprise me to see TBT more than double over the next few years as interest rates will likely move higher in spite of the Fed's attempt at rate manipulation.
Today, I did a little back-filling in my Sabinal One portfolio. I increased my holdings in FLT, where I am up nearly 20%. I also took a small short-biased position in UDN (an Inverse ETF on the US Dollar).
Otherwise, I am in a wait-and-see mode. No need to panic and head to the sidelines and no need to put a lot of money in play right now. Watch your stops and make sure they are at least as tight as Equity Analyzer recommends.
This is a great time to take profits and move to cash for a few weeks if you are risk averse. I have no idea what the market will do if the political impasse occurs (if it occurs) regarding the de-funding of Obmacare. I have no idea what the market will do if our President does more than blur the red lines in Syria. I have no idea what the market will do if any one of a dozen significant and exogenous events occur in the next few weeks. But one thing I am certain about… I know that my exit strategies are in place for any market event. I know that my trade-timing tools will tell me when it is time to move into inverse ETFs. And you can rest assured that I will keep you posted on exactly how I plan to incorporate these rules in my trading strategy.
Another thing I am certain about… I know that not knowing what the markets may do in dire circumstances is not cause for worry or panic. The beautiful thing about having a rule for every market condition, is the rules protect my stock market investments and those of my clients from undue loss; and those rules will recommend when it is time to move from a bull-market mind set to a bear-market mind set.
My advice to you is simple… Make sure you have rules… make sure you use those rules… and make sure you don't panic or become emotionally unstable when/if the poop hits the fan when you least expect it. If you are steady, determined, disciplined and rules-based, you will do fine in any market.
Have a great week in the market!