Market Timing often leads an investor to look back at the past and question conventional wisdom. The so-called January Effect was first noticed in 1942 by Sidney Wachtel an investment banker. In a nutshell, investors sell stocks in December due to tax implications and for year-end window dressing. This allows investors to buy stocks in December at lower prices and in January when fund managers and investors re-purchase stocks, they push back up prices and investors can sell stocks for profits. To read more about the January Effect select this market timing link. / Read More

Market timing and studying market direction is something I enjoy very much. Today’s plunge after yesterday’s push up on what was perceived as good news out of Europe is just the roller coaster ride those of us who sell options need. I sold options on RY Stock, BMO Stock, XOM Stock, T Stock, MRK Stock, Intel Stock, and MSFT Stock. The volatility index jumped 32% yesterday. If only my market timing and market direction work would allow me to buy and sell the VIX Index with the same confidence I have in put / Read More

Market Timing is simply trying to establish a strategy to aid in making buy and sell decisions of risky assets such as stocks and commodities. Basically an investor is trying to find a strategy or system to “time” when to buy and when to exit from an investment. A market timing system normally tries to take into account technical aspects of movements of risky assets such as using the 50 day moving averages or 200 day moving averages which is a popular market timing method. Market timing systems also try to looks at / Read More

Market timing today (Nov 2) was pretty straight forward. After two days of heavy selling, in particular yesterday, I would have expected a bounce today especially with the S&P so close to the 1200 level. This is exactly what happened. Sometimes market timing is easy and today was one of the easiest in a long time. I received a number of emails wondering if I was selling puts today. It was yesterday during the plunge that was the time to be selling puts. When the market direction moves back up as it did / Read More

Market Timing sometimes is easy to predict. The market was very overbought so market direction should be down for a few sessions. It usually just takes some news to turn the tide and today was “Back To The Future” as Europe returns yet again to haunt the markets and on Halloween too. This makes the job of market timing pretty simple. Since Oct 4 the market direction has been up as all North American indexes have been on a tear with the NASDAQ, which has led the recovery since March 2009, up 17% / Read More

I started investing in 1973 and its incredible that this is the best October since 1974. The market direction has been up since October 4  despite so many market timing technical indicators that warned investors that this was just a bear market rally. However the number of investors who are in this market now is low including the “smart money” investors. Even today most analysts are bearish and if you check out this market timing link you can see that bloggers are split with a slight bias to bearish. Market timing and market / Read More