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What is Market Timing?
Timing is everything in today's volatile
markets. However, misleading signals and ambiguous chart patterns often leave
traders in a quandary over the real market direction.
"Market timing is one of the best ways
to control risk."
Market Timing:
- Market
timing is a top down view of the market and its prospects. The elements
of market timing including investor sentiment, trends in interest rates
and fed action, overall market valuation, technical underpinning, and flow
of funds. Market timing provides investors with the opportunity to avoid
major market price declines.
- Without market timing, then, it's clear that over the
short-term the market is an inefficient vehicle for making money.
- Market timing and chart patterns for
QQQQ timing (AMEX:
QQQQ), S&P 500 timing
(AMEX: SPY),
Dow Jones timing
(AMEX: DIA) based on the volume of all index constituents works
very well for timing index shifts.
- "Market timing has shown itself to be futile in every
study ever conducted. The idea of market timing and the reality are night
and day. The idea is very compelling. It presupposes you can be on the sidelines
when the market goes down and in when it goes up. If you could do that you'd
be richer than Warren Buffett. The reality is it leaves most people in the
market when it's going down and not in when it's going up."
- Many argue that using any market-timing tool is a waste
of time.
- Market Timing provides investors with the opportunity
to avoid major market price declines.
- Forecasting chart patterns and asset prices is
a problem that has fascinated investors since the very advent of financial
markets. Accurate predictions of the market movements imply fast and substantial
capital gains. Attempts to forecast stock prices are numerous.
- The principle objective of market timing is to
provide investors with the opportunity to avoid major market price declines.
Obviously, if investors can avoid weak periods in the market and participate
in the strong, they can also experience superior returns over a buy-and-hold
strategy. What is surprising is that studies show that investors can still
outperform a buy-and-hold strategy, even if they don't participate
in the strongest times - as long as they escape major market declines.
- The elements of market timing including investor
sentiment, trends in interest rates and fed action, overall market valuation,
technical underpinning, and flow of funds. Market Timing is a top down view
of the market and its prospects.
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