This Blog is like a continuation of the Blog that we sent out almost two months ago (see below). The reason that we are adding this new material to the previous one is to show that the current market is still waffling and nothing significant has really changed (same old, same old) in spite of what the "news" says is happening. "The press" prints what sells, truth or not. So, as you will see below, this market has been "flat" or "sideways" for almost two years now.
As you may or may not know, "sideways" markets are markets of uncertainty and/or fear (that is why they are called "consolidation patterns"). When some bad news comes out (truth or not), traders run for the hills. Then, when the bad news does not materialize, the same sellers come back buying and basically reverse their actions and fears. The main reason why most "dips" are "V-Shaped" is that the same traders that sold on the way down bought back in almost the same fashion as they sold (that is, same prices and dollar amounts).
All of the reasons from the previous email (seven of them) are still the main concerns for investors; but in reality, none may actually materialize soon. In markets like this, little guys (like us) could suffer massive losses in markets going nowhere by getting whipsawed !!!
My personal opinion is that, without any REAL massive screw-ups (as in overdone tariffs by Trump/China or stupid unnecessary rate changes by the Fed, etc) this market will break out to the upside for at least the next six months, mainly because the US economy is still strong. I can't remember a single "market crash" when corporate earinngs were high. Of course, we do not follow what I think, we follow MIPS. Stay tuned...
Here are the latest "Flat Markets" Graphs ...
3rd Quarter of 2019 (SPY)
- see the last 4 failed attempts to break the Support Level to the downside
Last Six Months (S&P 500)
- plus/minus 3.5% trading range
Long-Term View
- all the way back to 1993
- are we now in a "topping" pattern, as in 2000 and 2008 ???
Performance - MIPS/Nitro vs SP500
- Last 12 months (MIPS is blue, SPY is red)
Results are about the same (both flat), but MIPS provided a "smoother ride" (thus helping us with our health)
Please notice that when the SPY took the big dip in 4Q'18 (-20%), MIPS was up +2% (as it most likely will be on the next "big crash"). This is what MIPS members are counting on by using MIPS.!!!
Good Trading...
Paul Distefano, PhD
CEO / Founder
MIPS Timing Systems. LLC
Houston, TX
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