It was just a week ago that I shared that we could possible take Bear Market positions during this past week, but that was not to be.
As you know - I'm in Cash and this Geo-News driven market fell, big time. I guess I am smart to be in Cash, but I was hoping to be even smarter and with the help of a Bounce (a mini-rally that was not to be - either) go Short again.
So now that this past week has continued to digest that "Thursday Debacle" of the 6th -- the question is or should be -- where are we - and - where are we going?
Please - SCROLL DOWN to my: Current Market Commentary -- and perhaps skip the following - Narrative.
For me, Investing Wisely simple boils down to two questions - What and When?
With the incredible quantity of chatter available on the Internet and with thousands of investments being touted as - worthy of your investment money - what is a serious Investor to do in times like this and beyond?
Clearly - Investment risk must be assessed carefully, therefore to take a long or a short position needs more than just good fundamentals or technical analysis that seems to make sense.
I read an enormous amount of material each day, most of which is good, however it is rare to find even a single specific recommendation or even generic recommendation such as gold, energy or technology, etc. Excellent Analytics and Specific and Timely investment decisions are what makes you money, and I believe loading one's head with tons of details deters from that goal. Further, when I do find a recommendation or two, in my reading, there has never been an offer to tell me and others when to close out the recommended transaction without a fee - or something similar!
* Stock Brokers want to sell you something but never call and say - it's time to sell. Hum!
* Mutual Funds keep you invested - rain or shine and love charging their annual fees, which are much higher than advertised. They say - "read the prospectus." Hum !
For over 50+ years I have continued to develop and sharpen my skills of -- Sector, Industry Group, Commodity, Company and ETF -- Rotation.
My Rotation Methodology is simply - Cycle Analytics. With this tool it is rather easy identifying the specific Sectors, Industry Groups, Commodities and their ( Component Companies and ETFs ) that are in favor. And as a result from these studies / analytics, we also ( by default ) learn - what securities ( Companies and ETFs ) are not in favor. That's equally Important!
With all the advice that is offered on a daily basis, over these many years, I have found it impossible to cross-reference that - constant flow of advice and opinions with anything tangible that says - this is a solid reason to own a given / specific security.
So, over the coming months, I would like to share some specific Bull Market recommendations as well as Bear Market recommendations, But, you should know that I believe, ( luke warm - doesn't work ) - - - for you to make this work profitably for you over the long term, you must personally have / possess two very precious personal attributes - Patience and Discipline.
In sharing this incredible Methodology of knowing whether the General Market, Sectors, Industry Groups, Commodities, Companies and ETFs - are worthy of your investment money - I have found that - all you need to know is -- if they (Securities) are - Going-To or Coming-From. This is what securities "Rotation" is all about. So, for example, from a Research / Analytics point of view - it's all about being able to identify - What (which ones) and When (time and date) they (specific securities) change from Going-To to Coming From. That's how I go about identifying - Tops and being sure that - the Inflection Point - is accurate for that specific security at that specific time. (It's just the opposite for identifying - Bottoms).
Understand that, I believe, each security has it's own signature and it's rate and time table of change is different from most all other securities. And, each security often changes their signature just to snafu both you and the Analyst. That's why you, quite likely do not enjoy a high percentage of profitable transactions. This is to say - all the Companies / ETFs in a Sector or even an Industry Group do not move in unison (Wall Street and Mutual Funds want you to believe they do!), month after month and year after year. However there are those (a few) that do, allow you to clearly read their signature, and they can be readily identified long before decision day to invest.
Inflection Points - both Bull and Bear, within the General Market, only occur, on average, 3 - 5 times per year. When they occur, we often have a great deal of lead time for preparation and very little time to respond or implement. At these critical Inflection Points you simple do not have the time to dink around looking at your investment tools, or reading what Harry or Sam think, as a luxury or a form of procrastination. Harry / Sam, and their peers have screwed up more opportunities for profitable investing than you can imagine. This is true on the Buying / Shorting side and also true on the Selling / Covering side.
My Methodology for Wise Investing, has preformed brilliantly for me, for many years and is anything but a "Trading" approach. It's repeatability is very consistent and accurate but does not occur on yours' or my time clock.
So, I invite your to take the time to follow along and you will be both amazed and profitable pleased.
From time to time and with the cooperation of Safe Haven, I will publish this (same) article with specific recommendations and/or and updated commentary. If I have nothing to recommend, which is often - I will provide an Update about every two weeks.
Commentary : (for May 21th:)
I remain a Bear waiting to position the balance of my 100% CASH ...
However, for those of you who are willing -- I just might take some - Near-
Term (1 - 6 weeks) Long Positions -- first.
It well could be that the "Mini-Bounce" I was looking for last week could turn out to be a Near-Term Bounce (mini-rally) worthy of participating in. You should know, if I can't see / project at least a net 10% profit - I won't play.
I would like to point out that all this (I call it gobble-goop) that you read about Support and Resistance, Dow Theory, Elliott Wave, Shooting Stars and a thousand others may be the way to go for my fellow financial analysts, but it never has produced the profits that I demand for me or my Clients - so - frustrated and near broke, many years ago I wrote my own Methodology. Simple stated, since then - my stuff is both quite different and it works very well.
"I won't play" -- is a term I started using over 50 years ago. If the playing field is not at least flat or better yet tilted in my favor -- I won't play. Like / Similar to the good name of this Blog -- my Safe Harbor is Cash.
So, very possible, this past week's 4+% downside has produced a Near-Term - Buying Opportunity. We'll see early in the coming week or so.
I'm a bit windy tonight - but I would like to (also) share that - - I have always listened carefully to what the Stock Market is saying (each day and particularly each week) - and it's clearly whispering BUY. Listening is important and being flexible and nimble produces profits!
My most negative Sectors are: Just about ALL - - but - - Gold and Silver turned negative on Thursday. Do not take positions yet! Specific and profitable stock selection is going to be very difficult in this market environment.
There are no positive Sectors - so, if I BUY, it will be high relative strength Companies and (Regular) ETFs.
Is Anybody - Listening?
The Stock Market is going to be very, very rough on both - - Buy and Hold & Mutual Fund Investors.
Traders are going to have their heads handed to them on a plate.
It is not going to be a pretty market again for quite some time.
If you would like the Sale / Cover side to my specific Recommendations, Information about my Work, or of me personally - just send an Email and I will respond promptly.
However, please understand that it is important to me to know a bit about you - - so, I will ask you share with me a little personal information and investment background - just to get acquainted. Time will tell if there is a fit with what I do and your investment objectives.
Just click on my name for my Email Address.
Thank you for your interest in my work.
Smile, have fun - Investing Wisely,