Sector
Market Timing
www.SelectSectors.com
Why
Market Timimg?
For weeks prior to the below events SelectSectors.com posted daily that
a Double Red Alert was in progress.
LA Times ( 9/22/01)
About 1.4 Trillion Dollars in investor wealth evaporated during
the week, raising fears that consumer spending will drop and
add more pressure to the economy.
9/17/01 ( From MarketWatch.com)
On record volume, the Dow fell 7.1 percent Monday, registering
its worst ever point loss, while Nasdaq fell 6.8 percent.
But trading went smoothly even as $600 billion in market
cap was wiped away.
Additionally, during this period the top SelectSectors.com pick
has been Gold ( FSAGX ) which has out performed all other
Market sectors.
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Merrill Lynch
is one of the largest investment house in the world. They have giant
research facilities and the top investment people. The below article
shows not how BAD they did ( losing 700 million in one year ) but
how hard it is to invest and how important Market timing is.
Merrill logs off Net fund Internet Strategies
Fund shuts down after a 71% loss in debut year May 4, 2001: 7:02 a.m.
ET NEW YORK (CNNfn) -
Merrill Lynch and Co. is closing its Internet Strategies Fund just
over a year after its debut with more than $1 billion in investor
money, the Wall Street Journal reported Friday. The fund has suffered
a 71 percent loss from its launch to date, wiping out more than $700
million in investor capital, the paper said.
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The focus of
this commentary is Market timing of Sectors that are in a trend, either
Up or Down. The results described are not purported to be universally
true without exception. They are however, expected to be useful when
well defined Sector trends are in progress.
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Up
Trend Market Timing
Down Trend Market Timing
Exiting due to a
sudden and large hourly NAV Change
Example Portfolios
based on top Regression Sectors
with and without Market Timing
Alternate
strategy for a Down Market
General
Select Sectors Timing Tool
Select Sectors Index
Down Market
Example
Up
Market Example
The above analysis
employs exponential moving averages
(EMA) . It is possible to obtain more precise timing results
using recursive orthogonal functions that estimate the local
slope of the data. This methodology in effect minimizes the
delay inherent in moving averages.
( "The Yen Recursed", by Dennis Meyers
Technical Analysis of Stocks and Commodities, Dec 1998 )
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