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Market Timing

Monday, March 12 2018

In our previous blog below, we pointed out that the SPY had broken out of its "triangle" pattern to the
upside, and that the Nasdaq 100 (QQQ) had climbed about 65% of the way back to its all-time high. 
Since then, the QQQ has completed a "V-Bottom" pattern and has broken out above its all-time high
(see graph below). 

From here, I expect the QQQ to climb higher, drop back to "test" this all-time high support level, and then
continue higher in 2018.  Of course, this "climb" will be challenged by real dips, fake drops, volatility,
etc. Top management from many well-respected advisory firms see a strong possibility for this bull market
to thrive for another 2-3 years. 

The challenge, of course, is to know when to get out of the market (or go short) WITHOUT chasing every
little fake dip and ending up getting whipsawed (nothing worse).  The algorithms built into the Blaster
Series version of MIPS were designed to avoid getting suckered into trading every dip and ending up losing
a lot of your hard earned money.  After much research, and through inputs from our MIPS family, we
have not seen nor been told about any other model on the market today that can beat MIPS in that game.

This is a time when we can either have a few more years with 20%+ gains, or a time when we give back
most or all of our gains from the last 8-10 years.  Please don't "go it alone".  Either use MIPS or find
another good quantitative model that did well in the market crash of 2008, and since then.

Good trading...

Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems, LLC
Houston, TX


<<<  Previous MIPS Blog  >>>
MIPS - Was Last Week's Market Move a Breakout ?

MIPS Members:

Of course, everyone wants to know if the most recent "correction" was the beginning of new "bear
market", or just a scare.  Let me say that, to my knowledge, there has never been a real "bear market"
without the country being in on near a "recession". 

I won't bore you with the details, but by all measures the economy is very strong (growth in the GDP,
more jobs, etc.).  So strong, in fact, that investors were initially worried about inflation and rising interest

I personally believe that this all began after the market that had been climbing for the last year or so
started to soar at a much higher rate and put itself in a position of being highly overbought.  Of course, the
fat kats that had ridden the market up did not want to give back a single dime, so they dumped from fear
of inflation and higher interest rates in this booming economy.  Then, a few days later, the fat kats who
had driven the market down by about 9% started re-buying, and the little guys joined them with their
"buy on the dips" strategy.

When the market was heading back up quickly to form a near perfect "V-Bottom" pattern, the up-tick was
reversed on a very good jobs report, because investors were sucked in by the crap from the press
claiming that the low unemployment numbers would surely lead to inflation.  Then, the crap was negated
by the fact that many new jobs were filled by a small percentage of the massive number of people that had
given up hope for a job and hence were in the "not looking for a job" space.  In other words, the new jobs
had not only lowered the jobless rate, but they had INCREASED the "participation level".  This means that
many of the new jobs went to some of the millions of people that had given up finding a job and had run
out of gov't unemployment benefits.  If this is correct, the labor force is not close to being tight.

As a result of that above, the market seems to have broken out of the current "triangle pattern" seen in
the graph below.

Of course, this does not mean that the market will reach highs in the near future. I think it will, but I am
not MIPS.  To be comfortable about when to go in and get out of the market, follow MIPS.

Paul Distefano, PhD
MIPS Timing Systems, LLC
Houston, TX

Posted by: Dr. G. Paul Distefano AT 08:42 pm   |  Permalink   |  Email

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Houston, TX  77292

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