One of the Market Timing Tools

Most of the brokers, mutual funds companies dont like people to time the Market.

The give you long list of excuses why market timing is not good.. but the stats prove it other way around.

Here is a very good article..

http://www.kiplinger.com/magazine/archives/2009/08/can-you-time-the-market.html

Key points:

• Bob Parrish lost 70% of his retirement savings based on advice from a financial adviser
• Parrish fired his financial adviser and decided to try timing the market
• Parrish did quite well; his portfolio has gained an annualized 23%
• Market timing is a tough strategy and few do it well. Parrish admits, “I’m savvy enough to recognize I’ve been very fortunate and that it’s not going to last.”
• Mark Matson, a Cincinnati money manager, likens a market-timing strategy “playing Russian roulette”
• Successful market timing requires three key ingredients: a reliable signal, the ability to interpret the signal correctly and the discipline to act on it.

In my recent talks with one of the very good traders Linda Rashcke about some of the strategies that I use, she suggested the I look at collection of indicators for some general Market timing.

I have stolen this model shamelessly (Six Sigma = Steal Shamelessly) for my general market timing, One of the components of that is what I am sharing today.

The indicator that I use is

1) $BPNYA

2) 10 day SMA of $BPNYA

When $BPNYA drops below 10 day MA - SELL

When $BPNYA rises above 10 day MA - BUY

The below chart shows you the NYSE Bullish Percent Index

For more on NYSE Bullish percent index, please read

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:bullish_percent_inde

This chart has $BPNYA, its 10 day MA and $SPX on the same chart.

You can see from the chart that whenever $BPNYA has dropped below 10 day MA, SPX has dropped in next day or two.. and same when $BPNYA has crossed above its 10 day MA then market has rallied..

So use it and be successful..