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Market Timing

Wednesday, July 25 2018

In our previous Blog (shown below), we pointed out that this market could be getting way "over-bought", but we pointed out that our economics are very good now and that usually leads to "new highs". Since then, corporate profits have continued to grow (strongly), Trump's tariffs and associated deals seem to be getting acceptance in the EU, etc.  In other words, many important "things" seem to be doing well.  SEE PROOF BELOW.

SPY - Breakout above Resistance



QQQ - New Highs



The danger, of course, is that if any one of the major issues at stake worldwide today (N. Korea, China's retaliating tariffs, Europe rejecting our newest tariffs without a counter-deal, a breakdown in profit growth (especially from hi-flyers, like the FAANNG stocks), could be devestating.

For Example

See the participation of FAANNG stocks in the SP500 Index (Facebook, Apple, Amazon, Netflix, Nivida, Google).
Market statistics show that 122% of the 2nd quarter gains in the S&P 500 Index resulted from the performance of just ten stocks, eight of which are from the technology sectorThe blue column on the right below shows what % of the SP500 gain each individual stock accounted for (e.g., AMZN's growth accounted for 36% of the S&P 500 growth).



So, without any major set-backs from any of the issues above, all US indices should continue to grow with good strength; but even a slight setback could derail this extended bull market


The "derail" part is where MIPS comes in and will tell us if any "upset" that happens is strong enough to change the direction of this extended bull market, or just strong enough to result in another rather small setback.  Stay tuned...

Be careful, and feel free to call anytime between 10am-10pm CDT (six days/week).

Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems, LLC
Houston, TX
281-251-MIPS(6477)

support@mipstiming.com


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<<< Previous MIPS Blog >>>

MIPS Members:

There are a lot of things going on now that could be a "catalyst" for a big market crash or correction (tariffs. Brexit, worldwide geopolitical unrest, 2018 mid-year elections, inflation, overbought stocks, etc.).  On the bullish side, US companies are stiil experiencing growing gains in corporate profits, high employment numbers, etc.).

Overall, however, some very knowledgeable financial experts think that a big market drop is inevitable soon.
- For example, read the following two of very many articles that are being posted at an alarming 
  rate now:

https://www.marketwatch.com/story/the-stock-market-is-days-away-from-setting-a-bearish-record-2018-06-28?siteid=yhoof2&yptr=yahoo

http://www.businessinsider.com/jim-rogers-worst-crash-lifetime-coming-2017-6

Also, at least look at the following graph. This is why many investors believe that the stock market is grossly "overbought" after its recovery in March, 2009.




We have to at least admit that this is a scary period. 
But, we are not alone.  We have MIPS to tell us what to do, and MIPS reacts well in down markets. 

See the MIPS actual trades and performance in the period of the "2008 Crash" (Dec'07 - Mar'09):




Be careful, and feel free to call anytime between 10am-10pm CDT (six days/week).

Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems, LLC
Houston, TX
support@mipstiming.com

Posted by: Dr. G. Paul Distefano AT 07:11 pm   |  Permalink   |  Email
Monday, July 16 2018

There are a lot of things going on now that could be a "catalyst" for a big market crash or correction (tariffs. Brexit, worldwide geopolitical unrest, 2018 mid-year elections, inflation, overbought stocks, etc.).  On the bullish side, US companies are stiil experiencing growing gains in corporate profits, high employment numbers, etc.).

Overall, however, some very knowledgeable financial experts think that a big market drop is inevitable soon.
- For example, read the following two of very many articles that are being posted at an alarming 
  rate now:

https://www.marketwatch.com/story/the-stock-market-is-days-away-from-setting-a-bearish-record-2018-06-28?siteid=yhoof2&yptr=yahoo

http://www.businessinsider.com/jim-rogers-worst-crash-lifetime-coming-2017-6

Also, at least look at the following graph. This is why many investors believe that the stock market is grossly "overbought" after its recovery in March, 2009.




We have to at least admit that this is a scary period. 
But, we are not alone.  We have MIPS to tell us what to do, and MIPS reacts well in down markets. 

See the MIPS actual trades and performance in the period of the "2008 Crash" (Dec'07 - Mar'09):




Be careful, and feel free to call anytime between 10am-10pm CDT (six days/week).

Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems, LLC
Houston, TX
support@mipstiming.com

Posted by: Dr. G. Paul Distefano AT 10:05 pm   |  Permalink   |  Email
Sunday, July 08 2018

It looks like the Bulls are still hanging in after the big drops in February of this year. Technically, the trend is still pointing UP (thanks to the technology sector).

Like always, there are issues on both sides of the stock market.
In summary:
  1) On the positive side we have higher profits, lower unemployment, slight increase in wages, etc.

  2) On the negative side, we have the potential of serious trade wars with China, Germany, Mexico, and

      Canada; serious political issues here at home and with North Korea, tightening monetary policy, etc.

My broad opinion is that, if we can avoid a nuclear war with North Korea or an all-out civil war here, the positive economic fundamentals will override all else, and the market will continue up for at least the rest of 2018.

To my knowledge, we have never had a serious market “Crash” (drops of 40-60%) when our economy is experiencing higher corporate earnings and high dividends.  [However, many times the market will turn south when profits are still high because the fat-kats at large banks and financial institutions start selling when they get wind of falling profits long before we know (and believe me they have plenty ways of doing so long before we do.)]


THE MARKET IN 2Q’18+
In order to better understand the market performance in the first week after 2Q/18, let’s compare the 1st quarter graph to the 2nd quarter one (see graphs below).

The first graph immediately below shows both of the big dips in 1Q’18, and support holding at the SPY’s 200-SMA. Of course, this was a crucial point for the market, as it could have gone either way from there.
SPY in 1Q’18



Moving on to one week after 2Q’18, it is obvious from the 2Q’18 graph below that the SPY bounced up off of its “strong” support level (200 SMA) three times and crossed above the upper line of the triangle pattern.

SPY in 2Q’18

 

Market Driven by NASDAQ stocks
Market statistics show that over 100% of the 2nd quarter gains in the S&P 500 Index were from just ten stocks in the SPY, eight of which are from the technology sector (like the FAANNG stocks). 
The blue column on the right shows what % of the SPY gain the individual storks accounted for.




The performance in the QQQ emphasizes this behavior. Please note that the QQQ moved above its Jan'18 high.
QQQ in 2Q’18


From the above, one can see that the QQQ is heading back up toward it’s all time high for a second time in three months and with high momentum.

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We believe that both the S&P 500 and the NASDAQ will continue up above their resistance levels and move into New High territory this quarter. But, remember, we are all going to follow recommendations from MIPS, not me.
 


Good Trading…

Paul Distefano, PhD

CEO / Founder
MIPS Timing Systems, LLC

Houston, TX
www.mipstiming.com

281-251-MIPS(6477)

Posted by: Dr. G. Paul Distefano AT 11:53 pm   |  Permalink   |  Email

MIPS Timing Systems
P.O. Box 691047
Houston, TX  77269

An affordable and efficient stock market timing tool. Contact MIPS
281-251-MIPS (6477)
E-mail: support@mipstiming.com