Simply put, the bad news is already baked in to the market so things that aren't as terrible as estimated get bought on a day/week when some of the biggest companies in the world report earnings.
One example and probably the best ever was WD Gann who used mathematics and a knowledge of market cycles. He traded the markets from the early 1900's until 1955, when he passed. He wrote several books wherein he described his methods, but his books were intentionally written cryptically and thus difficult for others to easily reproduce his results. Gann, during his life, publicly predicted, in a NY financial publication, the future price of the Dow Industrial Avg on three different occasions. His predictions were for the future price of the Dow one year in advance and on all three occasions, his predictions were accurate within one dollar on the day specified. So, markets can be timed with great precision, as the markets are not random. The one disadvantage for Gann was that he didn't have the advantage of computers and is why he hand-charted the Dow daily and used those charts as the basis of his work. Some of his writings are online in PDF files for download if you can find them.
Cursory Wiki review
It was well known that Gann and his son didn't get along because his son wanted his father to spoon feed him his methods. Gann wouldn't do it because he wanted his son to earn it, as he obviously did. I've read that Gann was worth in excess of 50 million at the time of his death ($500M in today's dollars). Choose who you want to believe. In the past 20 years or so, using Ganns understanding that markets are "cycle driven" and some salient information gleaned from the author John Murphy regarding technical indicators, I have developed my own system to time the markets. It's not necessarily easy and my own success has been long in coming but I can tell you from my own personal experience, again using Gann's understanding of market cycles, the use of recalibrated technical indicators applied across time, that the markets can indeed be timed. I also believe there are likely many others that successfully time the markets because if I've done it, others have as well. I can tell you that they can be timed with precision for extremely high profit. The most difficult part is doing it "in the moment" ... the "hard right edge", that is where the skill and ability lie but you must have the "system" to see the cycle. The trick is having the tools and understanding in using them. You can't purchase the tools ... software in a box off the shelf ... you have to build them. As John Murphy told me, there are two choices ... find someone else's "system" and make it your own ... or ... build your own from scratch, which is what I've done. So, when you say that markets cannot be timed, I'm simply telling you that's not true. I understand why you believe it but it's simply not the case. Look at my post on Oct 5, 2021 regarding IONQ. Those comments were based solely on market cycle alignment.
If markets can be timed consistently and accurately you would have unlimited wealth, no?
No ... not necessarily. You would have access to a level of wealth many don't, but I understand what you're asking. Timing the market isn't necessarily easy nor should it be ... it takes a lot of work and a personality to master the challenges of performing efficiently, so the person "behind the wheel" matters and is not for everyone. The shortest of timeframes are the most difficult with the smallest trade profits but the markets can be traded in any timeframe to suit your lifestyle. The shorter the timeframe the more difficult it is to effectively trade it and requires your constant daily attention. The easier read is in the longer timeframes for single stocks and the longer-term option positions are where you really build wealth over time. You can't master the longer-term charts until you've mastered the short-term charts. This is by no means "get rich quick" because it's not. I only responded to your post earlier because I wish someone would have planted that seed in my thick head years earlier. It wasn't until after reading some of Gann's books and studied with a group out of Australia, who taught Gann's methods, did I start trying to figure it out on my own, with the encouragement of John Murphy. My system isn't built on algorithms but requires live reading of raw, unfiltered financial data. It's much easier to read the longer-term intervals than scalping the short intervals but working in the shortest intervals is where the learning takes place in the shortest amount of time. There are no teachers for this, other than Gann's cryptic books, and my experience with the charts themselves. The historical chart (dead candles) has been my best and most reliable teacher ... because there are no lies and ignorance there. I've made MANY mistakes but that's the only way to learn. But, back to your question ... there's plenty of money to be made but the real goal is the quality of your chart read and ability to navigate the trade entry and exit efficiently. My apologies for the long-winded post.
Today's action helped by Joe Manchin's flip on the Inflation Reduction Act.
It was zooming before that, too, not sure what that company has that other solar stocks don’t. I also wonder about the followup news of leftover solar panels polluting the environment from an article a week or two ago. Anyway, I’ve made close to $6,000 off 100 sh in less than 2 days and have preferred oil and gas stocks in 2022.
James, you enjoying this stunning good month while we can? I will have my finger on the sell button as we near September. Have you been accumulating value?
Not sure DLTR is value at 24x but I inched in this week. Sadly I wasn't able to add to any positions before the big pop. Been more in the mode of waiting for the market to come to me so it's been a quiet month.
Congrats! I've done well with energy too. I know ENPH isn't the only one but they have a home battery solution for Europeans dependent on Russian gas. Just imagine the home HVAC market there this year as well. CARR has not moved though.
Chips act moving thru the Senate I assume. It passed the other day and today it passed in the House. I'm assuming it was her husband. Pubs are always crowing when he trades.
Looking at the chart on NVDA and its recent downside move, she may be buying NVDA to cover short positions to close bearish trades. If that's true she would have made some nice profit assuming she caught most of the move.
FWIW, Cramer’s comments:
True, things like debt and gross margins often aren’t mentioned by some analysts in their excitement over eps. AMZN is pretty far from its high, I bought a few shares today for a trade because it’s probably too big to have an amazing return long term.
Sold UNM at 36.07. 44% gain with dividends reinvested. Looking at INTC.
Great trade!
www.marketwatch.com
You are the thread King of picking the low hanging fruit! I wish you lots of luck but I might have split 50/50 with AMD or something like AMAT that hasn't popped as much as KLAC or LRCX. I totally understand your dividend strategy though and I have plenty in my IRA's. I reinvest every last one of them.
Yes but although it's my favorite month personally, I'm thinking cyclicals other than energy and banks. I'm still below benchmark on oil names so I doubt I sell a share of PXD with that variable dividend. Plus I lightened up PXD and my energy fund by 25% already. Other sectors are definitely on the table to sell.
I’ve been heavy into energy with oil and gas, one solar, one coal and a power infrastructure stock:
You got some good stocks there. After a rough stretch there from 2014-2020, Joe Craft has had quite the rebound the last couple of years with ARLP.
Yes, rare earth minerals should pay off, though I’ve foolishly lost patience with this stock a few times.
Back around 1997 or so, I built PCs for side-hustle profit. Got burned really bad on some AMD chips and accompanying motherboards. I swore on Intel ever since. Kinda crazy since AMD operated fabs here in Austin years ago. Many of former co-workers at NXP were AMD employees before fab closures. AMD chips are highly rated these days.
Green light us on when you start buying tech stocks since I greatly respect your cautious investing approach! I hold 30 sh NVDA and only a few shares of ASML and GOOGL in the tech sector currently. Do you still work in the tech sector, Austin, at NXP?
September may well be a “Come to Us” month to calmly make some buys before things get a bit crazy around Nov elections and Fed watching.
A tad riskier, I think, than my ENPH and PWR in clean energy, but you well may strike gold!
