Why All the Flip-Flopping?

Mike Turner |

I received a snarky email this week, though it was not directed to me, but to my support staff. Had it been directed to me, I would have liked to have said to this person... "You really need to either come to realize there is no such thing as a crystal ball or with all due respect, you should not be trading in the stock market." But, I must admit that my response seems a bit 'snarky', as well. So, it is best that I did not respond to his email.

The gist of his email (sans the over-the-top snarkiness) was this... "I have been following you for months and you continually flip-flop between being a bull or a bear. I can't figure you out and can't make any money with your continual flip-flopping!"

Without more detail, it is hard to know exactly what this person is referring to, but I will try to read-between-the-lines and proffer a response:

  1. Unlike 99% of the 'big-name-pontificators' in the world of financial forecasting, I am agnostic in my economic and market analysis. Certainly, I am not agnostic when it comes to a political opinion, but when it comes to 'reading-the-tea-leaves' of the global economic and global market condition, I call a spade a spade. If the near-term market this week looks bearish, I'll say so. If it looks bullish, I'll say so. If my systems tell me something different a week later, I will pass that along to you. Most of my conclusions are based on my proprietary computational mathematical computer models. I am always trying to give you an edge and a heads-up on the near-term future of the market.Each week, my systems perform a 12-year computational time-cycle analysis of the global markets. We drop off the oldest week and include the most recent week in the algorithmic analysis. Sometimes this results in a forecast that reverses from being bearish to bullish or vice versa. I could, of course, just ignore these reversals and assume the analysis is wrong. But, until I can see a mathematical error in the model, I will rely extensively on these forecasts. Keep in mind that "extensively" does not mean "exclusively". And, by the way... I do not do a lot of week-over-week flip-flopping... at least not for the near-term forecasts. For example, I started out being bearish for the month of August... stayed bearish for the month of August... and am still bearish in this second week of September.
  2. But, I suspect the author of the email was really not complaining about my supposed flip-flopping so much as he was complaining that I was not providing him with a crystal ball. You see, I find that immature, lazy or naive traders want someone else to do all the work and provide them with a 100%-guarantee-of-success kind of trade. For those readers who are looking for that kind of forecast, with all due respect... it just doesn't work that way. Nothing is guaranteed in the stock market, other than the fact that the stock market will change over time. No trade is a guaranteed successful trade regardless of future market conditions.My job is to provide you with an out-of-the-box-kind-of-insight... a different perspective... and, hopefully, the ability to make more winning trades and fewer losing trades. If you want more than that, I am not the guy to follow.
  3. If you are expecting the time-cycle forecasts to be something magical that somehow divines the future and the mind of God, then you will be sorely disappointed. The time-cycle forecasts are very simply a mathematically complex model that has the ability to often (not always) be uncannily accurate. We have found the model to be far superior to any other forecasting model we have seen, but that does not mean it is a crystal ball that will make you rich. If you are looking for a crystal ball, then again... with all due respect... please understand that no such thing exists! Quit looking for something that does not exist. There are no magic market predictors. Think about it... If I or anyone else in the world had an infallible market predictor, do you think you could use such a wonderful tool for less than $2k per year? Seriously?Will our time-cycle charts provide you with the opportunity to beat the market on a consistent basis? Certainly, I believe that to be true, but you still have to pick the right trade, the right timing to get in and most importantly, the right timing to get out.

    But, as good as I believe our tools are... they will never give you winning trades 100% of the time.

  4. If, on the other hand, you want to read a perspective that will give you an 'edge' on your trading that has a 70% probability of pointing you in the right direction... and you are adult enough to realize that 70% is NOT 100%... then this letter and my services are exactly what you are looking for.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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