"The third year of the Presidential cycle has historically been the most profitable year of the cycle in terms of stock market performance," says market historian and money manager Jim Stack.

The editor of InvesTech Market Analyst explains, "This third year of the four-year cycle is often characterized by an accommodative Fed policy, and usually accompanied by a stable and growing economy.

"Characteristically, most of the third year gains come in the first half of the year where the first and second quarters are among the strongest in the entire cycle.

Continue reading Market Historian: Top Sectors for the Presidential Cycle

Market Historian: Top Sectors for the Presidential Cycle originally appeared on BloggingStocks on Fri, 21 Jan 2011 10:30:00 EST. Please see our terms for use of feeds.

Well, it's time to own up to some mistakes. I've been wrong on a few stocks. Sure, the market has been volatile, and perhaps my ideas will eventually bear fruit, but it doesn't matter. When you're timing is off, it's off. And I've got to admit it.

Where shall I begin? Let's go with Disney (DIS). I've been bullish on Disney. Like many of the analysts on Wall Street, I became infatuated with the prospects for the Mouse's studio operations. A little too infatuated, I think. I kept throwing around this $40 personal price target. My rationale? Perhaps it turned out to be too simplistic; I basically said that, because Iron Man 2, Prince of Persia: The Sands of Time and Toy Story 3 were all ready to reign supreme at the box office, traders would become excited and more than willing to fulfill the promise of the one-year chart and keep the technicals moving in a positive direction.

Continue reading Thoughts from the Week: Stocks I've Been Wrong On

Thoughts from the Week: Stocks I've Been Wrong On originally appeared on BloggingStocks on Sat, 22 May 2010 11:40:00 EST. Please see our terms for use of feeds.

Continue reading Sell in May? A Look at Sentiment and Seasonality

Sell in May? A Look at Sentiment and Seasonality originally appeared on BloggingStocks on Mon, 03 May 2010 14:20:00 EST. Please see our terms for use of feeds.

The editor of Street Smart Report explains, "A few observations are in order given the current high level of bullish and complacent investor sentiment, and the market's overbought technical condition.

"Since at least 1917, each administration has almost always allowed the correction of any excesses in the economy and stock market to take place in the first or second year of their four-year term.

Continue reading A Look at the Four-Year Presidential Market Cycle

A Look at the Four-Year Presidential Market Cycle originally appeared on BloggingStocks on Mon, 26 Apr 2010 13:30:00 EST. Please see our terms for use of feeds.

"The conditions are in place for a 'Best Buy' opportunity," says Jim Stack, whose buy signal should receive special attention give the accuracy of his sells signals which side-stepped the bear market.

In addition, the money manager and editor of Investech Market Analyst is beginning to increase his equity positions, such as Nike (NYSE: NKE). He states, "With a portfolio of iconic brands, an identified growth strategy, recognized innovation, and sound financial footing, Nike fits the bill of being a great company."

"Very rarely do we have all these conditions in place - that's only occurred five times in the last 45 years. Historically, this means we should give the growing evidence of a new bull market every benefit of doubt.

Continue reading Step up to Nike (NKE): A 'great company'

Step up to Nike (NKE): A 'great company' originally appeared on BloggingStocks on Thu, 02 Jul 2009 11:30:00 EST. Please see our terms for use of feeds.

"The Fed lowered interest rates more than expected and in a way that has Wall Street talking; in fact, the stock market is setting up a potentially bullish technical formation," technician Mark Leibovit, editor of Volume Reversal Survey -- often ranked among the top performing market timing services.

He reports, "The market expected a 50 basis point cut to 0.5% with a chance of a 75 bp cut to 0.25%. Some even called for a rate of 0%. The Fed made a lot of people happy, though a bit confused, by lowered the Fed Funds rate target to a range of 0% to 0.25%.

"This is the first time the Fed has lowered rates to a range instead of a an actual number. It also bring the Fed Funds rate to its lowest target rate ever. The Fed also pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The stock market likes the lower interest rate and the Dow is up 360 points, the S&P is up 44 and the NASDAQ is up 81.

"As I write, all nine market sectors are trading higher, led by Financials which are up 9.8%. Goldman Sachs (NYSE: GS) is up 17.2% after reporting its first quarterly loss as a public company.

Continue reading Top timer sees bullish technicals after rate cuts

Top timer sees bullish technicals after rate cuts originally appeared on BloggingStocks on Tue, 16 Dec 2008 16:52:00 EST. Please see our terms for use of feeds.

I sold on Friday: It was just luck originally appeared on BloggingStocks on Tue, 30 Sep 2008 11:50:00 EST. Please see our terms for use of feeds.

Sy Harding, long-known for his work in cycle analysis, takes a look at the history of Presidential Election Cycle and what this portends for the next few years.

Interestingly, he explains how and why this cycle will impact the direction of the stock market in coming years regardless of which candidate becomes the country's next President. Here's his long-term assessment from his Street Smart Investing.

"As Paul Harvey once said, 'In times like these it helps to recall that there have always been times like these.' Yet the world hardly ever comes to an end. The future arrives. The cycles continue. Sunny weather still follows stormy weather, winter still follows summer, spring still follows winter -- every time.

"For investors there's nothing more important than recognizing that business, the economy, and markets also move in cycles, not endless straight lines. Recessions follow boom times, bear markets follow bull markets, bull markets follow bear markets -- every time.

"There are two cycles, one of intermediate-term duration, the other longer-term, which can be of significant importance to investors. The first is the annual seasonal cycle.

Continue reading Presidental stock market cycle picks no favorites

Presidental stock market cycle picks no favorites originally appeared on BloggingStocks on Wed, 30 Jul 2008 12:37:00 EST. Please see our terms for use of feeds.

This is part of a series of columns by retirement expert Dan Solin. Please bring him your questions in the comments box and he will answer as many as he can.

Is this a good time to invest, or should you sit on the sidelines until the market has "bottomed out"? This is the most common question I am asked.

It would be great if there was a way to tell when the market had reached its low. If you could do this, you would be able to buy stocks when the markets were taking off and retreat to risk-free investments, like cash and Treasury bills, in down markets.

Unfortunately, the data on timing the markets is very dismal.

One large study looked at more than 15,000 predictions by 237 market timing newsletters over a 12-year period. At the end of the period studied, 94.5% of the newsletters went bust. Not very impressive.

The financial media likes to hype stories suggesting that the markets are tanking or are poised for a rebound. These predictions are usually inaccurate and generally unreliable.

Here's a better question for you to consider: Should you be in the markets at all?

Continue reading Naked Truth Investing: You should be in or out of the markets, but never on the sidelines

Naked Truth Investing: You should be in or out of the markets, but never on the sidelines originally appeared on BloggingStocks on Sat, 26 Jul 2008 14:40:00 EST. Please see our terms for use of feeds.

Using a proprietary "volume reversal" trading strategy, Mark Leibovit has been consistently ranked among the top newsletter timers. In his VRTrader, he looks at the outlook for stocks, oil, gold & silver -- and offers his choice for exchange-traded funds for traders to play these markets.

Leibovit explains, "The stock market's decline, besides being huge, is relentless. Every rally was met with selling and fresh lows were soon hit. The Dow crashed through the March and January lows and is now trading at its lowest level since September 2006.

"Apparently, that 1500 point rally off the March low was just a giant head fake. The Dow is now down 19% since last October and the S&P is down 18%, approaching bear market territory."

"Breadth is dismal, and down volume is ten times greater than up volume. Sector action is terrible. Seven of the nine market sectors are down more than 2.5%. Ouch! Financials have done it again and have set a new five-year low. Oil spiked through previous records setting a new record high.

"The precious metals also showed strong gains today with gold up 32.80 to 915.10. We cleared the June 9th high of 907.20 touching 909.50 opening up potential to 931.00 (May 21 high).

Continue reading Top timer's upside targets: Stocks, oil, gold & silver

Top timer's upside targets: Stocks, oil, gold & silver originally appeared on BloggingStocks on Fri, 27 Jun 2008 08:40:00 EST. Please see our terms for use of feeds.

"Gloom is thick enough to cut with a knife," says market historian and seasonal timing expert Sy Harding, whose timing system has just triggered a new intermediate-term buy signal on stocks. Here, in his Street Smart Report, the contrarian explains why he believes we are now near a market low.

He also looks at four new ETF index positions he has established in his portfolio. "The slowdown continues. Foreclosures soar. Debt problems are spreading to corporate and credit card loans. The housing collapse continues. The problems are affecting employment.

"And of course the credit crunch continues. Gasoline hit a record high $3.26 a gallon last week. Consumer confidence, and corporate CEO confidence is at multi-year lows regarding the economy.

"The gloom and doom has spread from financial publications to local newspapers and magazines, now featuring stories of layoffs and local plant closings, local small businesses suffering, comparisons to previous bad times, even occasionally to the Great Depression.

"Is the gloom thick enough? Are other conditions in place indicating we are near a market low? Here's why we think so:

Continue reading Contrarian turns bullish on market 'gloom'

Contrarian turns bullish on market 'gloom' originally appeared on BloggingStocks on Thu, 27 Mar 2008 01:10:00 EST. Please see our terms for use of feeds.

Jim Rohrbach, a top timer for over three decades -- and one who successfully side-stepped the recent decline -- just issued a buy signal for the NYSE in his Investment Models.

"I am a mechanical investor. Each day my proprietary RIX indicator converts the stock market action into numbers that represent the trend of the market. These numbers then trigger buy or sell signals for the NYSE and the Nasdaq. It's that simple.

"And because the readings are mathematical, there is subjective interpretations. No guessing, no predicting, and no anticipating. I never try to out-guess my strategy. I act on every signal, without question, because I know that over the past 36 years I have caught every major up move and I have avoided every major decline.

"Big up moves do not come very frequently, so you have to take advantage of it by staying in the market until it peaks and turns down. I am going 100% invested today. I believe that the market can give us a nice up move from here.

Continue reading Rohrbach's RIX: Top-rated timer shifts to buy signal

Rohrbach's RIX: Top-rated timer shifts to buy signal originally appeared on BloggingStocks on Mon, 04 Feb 2008 12:57:00 EST. Please see our terms for use of feeds.

The Wall Street Journal's "Ahead of the Tape" column looks at (subscription required) one of the age-old market-timing indicators: the election year.

Conventional wisdom holds that election years are a good time to buy stocks because incumbents hoping to hold on to power, for themselves or their party's successor, will try to win voters' favor with fun things like tax cuts and spending to give the economy an upward jolt.

Conversely, politicians usually save things like tax hikes for their first two years in office, hoping we'll forget about it by the time election year rolls around.

The Journal argues that the subprime meltdown and general housing turmoil could make the election indicator less reliable this year. "Investors should also keep in mind the one time in the last half century the presidential cycle didn't work: 2000, when the dot-com stock bubble imploded. No amount of fiscal stimulus could stave off that bear market. It remains to be seen if Washington's pump-priming machine will work this time around."

Markets are too complex to use any one indicator -- no matter how impressive its past performance -- to try to jump in and out of the market. It's been said many times before, but most investors should just buy and hold and pay no attention to the election year indicator, the Super Bowl indicator, or anything else.

Are election years a good time to buy stocks? originally appeared on BloggingStocks on Fri, 28 Dec 2007 17:38:00 EST. Please see our terms for use of feeds.

A piece in The Wall Street Journal laments that the day to day gyrations of the market are hard to predict. Duh. Furthermore, the methods that once appeared to be effective in making predictions no longer work. Double-duh.

It's an interesting piece, and a good one, focused on the role that hedge funds may be playing in increasing market volatility. The problem is this: who really cares? According to some, days where 90% of shares traded in the same direction, was a good indicator of a bottom:

"This used to be a good signal of a major bottom," says Tim Hayes, Ned Davis's chief investment strategist. "Now, it could be turning into a signal of the end of a less-significant market correction -- or it could be turning into an inconsistent signal" that simply means investors are anxious

Well wasn't that enlightening?

There have been very few market prognosticators, and not enough to make me think it's anything other than luck, who have correctly predicted the markets swings over an extended period of time. Does any of this volatility matter for the long-term investor? No, and the long-term investor is the only one who's likely to do well over the long-term.

So sit back, dollar-cost average, and count on the long-term growth of the economy for long-term returns. And don't pay attention to investment strategists who use the word could twice in the same sentence.

Wall Street Journal ponders difficulty in finding a bottom: who cares? originally appeared on BloggingStocks on Tue, 11 Sep 2007 18:32:00 EST. Please see our terms for use of feeds.

Timing expert Jim Rohrbach, who successfully side-stepped the recent market decline, has just issued a buy signal for the NYSE in his Investment Models newsletter.

To assess what the market is doing, Rohrbach has been compiling an indicator -- known as the RIX -- every day for 36 years. Via this system, he has garned one of the top reputations in among timers.

His latest sell signal came on July 25, and since that time, the market declined some 900 points. His system has now issued a buy signal for the NYSE, and he has now moved to a 100% invested position.

Although the actual data used in compiling his RIX indicator is proprietary, he does notes that it coverts the action of the stock market into a specific number that identifies the changes in the market's trend. Whatever its makeup, the RIX has caught most of the major market moves of the past three decades.

Concerning his latest buy, he notes, "I wasn't too crazy about getting in on this signal because I was hoping that the market would sustain a larger loss. But, I never try to out-guess the strategy. I am a mechanical investor. I act on every signal, without question."

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

Rohrbach: Top timer issues a buy signal originally appeared on BloggingStocks on Wed, 29 Aug 2007 18:47:00 EST. Please see our terms for use of feeds.

A lot people look to religion or spirituality when things appear to be in chaos. But when the financial markets are looking out of control, investors should look up Vanguard Group founder John Bogle for reassurance.

BusinessWeek did just that, and Bogle was his same-old self: Investors should stay the course, ignore the volatility, but make sure that they have an adequate percentage of their portfolio in bonds. Of course, that right ratio depends on your time horizon and the size of your portfolio.

Bogle explains more intelligently than I can here why investors shouldn't do anything. As I said in my Volatile Market: Just ignore it, don't try to time it, individual investors (and the experts too) have a terrible record of timing the market. It's why the average investor's return is so much lower than the market's average return: We have a tendency to jump in and out at precisely the wrong times. What's the solution? Buy and hold!

I love Bogle's use of Shakespeare to describe the current market turmoil: "A tale told by an idiot -- full of sound and fury, signifying nothing."

Sound and fury: Bogle on the current state of the market originally appeared on BloggingStocks on Sun, 19 Aug 2007 15:10:00 EST. Please see our terms for use of feeds.

Unlike many who have turned bearish after the market's recent decline, advisor Jim Stack fortuitously moved to a bear market stance in his model portfolio as the Dow was hitting its record high.

At the time he noted, "When the DJIA scores a new record high, yet there are twice as many stocks closing down for the day (as the number closing up), then something is wrong. Declining stocks overwhelmed advancing stocks by a 2:1 margin, an ominous divergence that has never occurred in the past 75 years of market history."

As such, in his InvesTech Market Analyst, he stated, "We are moving to a full bear market defensive mode." Since that timely market call, he has seen an additional warning sign that has added to his concerns.

In particular, he cites a rare "killer wave" signal from the Coppock Curve, a technical indicator developed 50 years ago by Edwin S. Coppock. It can be described as a 'barometer of the market's emotional state.' As such, it moves very slowly and methodically from one emotional extreme to another.

Mainly, the indicator has been used to signal low risk buying opportunities. Stack notes, "Over the past 8 decades, this indicator shows a remarkable track record when it comes to signaling the start of a new bull market for stocks."

Continue reading Coppock Curve gives rare 'killer wave' warning

Coppock Curve gives rare 'killer wave' warning originally appeared on BloggingStocks on Fri, 10 Aug 2007 10:40:00 EST. Please see our terms for use of feeds.

Technical Analysis Lesson: Stochastics originally appeared on BloggingStocks on Thu, 02 Aug 2007 17:45:00 EST. Please see our terms for use of feeds.