Interim Market Update March 7, 2023

[Yodean]

Why does Market Update keep changing so many times in one month ? To me it does not instill confidence in TI - not to mention all the work involved in keeping up with my alerts - there r other chores to attend to.

I think the future is ultimately unknowable. Every prediction is just a guess, at the end of the day. You have to decide how much to bet on any particular guess.

Risk management is boring, but the #1 priority in any trading decision, irrespective of your risk appetite.

I've often stated that 8/9 retail investors lose over time - it's much higher for options' and futures' traders as a group, something along the lines of >95%, depending on which survey you read, who you talk to, etc.

So most focus on trying to find the Holy Grail of investing - to be in that profitable group of 1/9 positions' investors, or top 3% - 5% of futures/options traders - and most generally fail, over time. For a time, they may be successful, but over time ... they are doomed to a long-term negative CAGR.

Perhaps a more contrarian, simpler overall mindset is to examine what the 8/9 losing investors (or >95% of futures/options traders) do, and avoid doing those things, and often do the opposite instead, to win in the markets, long-term.

If you know 8/9 investors are going to lose, it may be simpler and more profitable to investigate what they do, instead of trying to find the Holy Grail - because there isn't one. Then do the opposite of what they do.

What do 8/9 traders do? The following are just a few things that popped into my mind atm, and I am sure there are many more:

-follow financial newsletters blindly; one has to always ask, if a particular financial advisor is so amazing, why would she need to sell a financial newsletter? i.e. she would already be rich and trading independently, quietly ...

-read a bunch of MSM headlines, mainstream financial journals, etc. (e.g. Economist, Barron's, WSJ, etc.) and then decide they understand "the markets" - those who buy headlines will eventually sell newspapers.

-not being honest about one's investing methodology and different theses by not regularly auditing her results and being a bit too stubborn about clinging to a particular idea when it's obvious it's not quite right - in investing, it's okay to be wrong, but it's not okay to _stay_ wrong; not if you want to be profitable, anyways;

*****

Many more to list, I am sure, but if you do the opposite of those three, you're prolly on your way to long-term profits.

*****

Keep it simple:

Any given year, there's a greater than 75% chance that the SPX will end the year higher than it started.

It's also somewhat rare to have two consecutive negative years in the SPX.

There has never been an official NBER-declared recession in Year 3 of the POTUS cycle (2023).

From what I remember the last time I researched, the last time Year 3 of the POTUS was negative for the SPX was 1931.

Just based on those four statements above, I am overall bullish on equities this year. It sets the background rate for the context of what to expect.

Plus, I am sure you remember about the JBS - you were partially responsible for that Divine Buy Trigger. Merci beaucoup! Jesus generally doesn't lie, although His Words often get misinterpreted.

[jonnyfrank]

Why does Market Update keep changing so many times in one month ? To me it does not instill confidence in TI - not to mention all the work involved in keeping up with my alerts - there r other chores to attend to.

I'm sorry you feel that way. I am very happy with the service because it suits my style and the different objectives of my different accounts. Also I believe, what you speak of, is a sign of the times. The current environment of the markets is very touchy and I appreciate the insights into different time horizons. I look forward to each and every release. Whenever it appears.

One thing that has worked for me over the years is to have different account with different investing approaches. I have several, including a shorting account and a 3x leveraged account among the long term account and several other accounts. I am about to open one for precious metals stocks, just for grins. I am not a big shorter, but I plan on playing a few short plays as the market begins to dip. I also read every issue and while sometimes we all have to ask for clarity, it is given.

[SOL]

Why does Market Update keep changing so many times in one month ? To me it does not instill confidence in TI - not to mention all the work involved in keeping up with my alerts - there r other chores to attend to.

Why does Market Update keep changing so many times in one month ?

Please quantify this statement. The long-term views hardly change, and if you are mixing several timelines, there is nothing we can do. What exactly is changing? Your statement is ambiguous, as I don't know what timeline or event you are referring to. The long-term views are quite stable, and you would be hard-pressed to show that they are changing much.

Long-term views

We said the markets would experience a second selling wave and one should use rallies to lighten up; this has remained unchanged for months. The same applies to our views regarding the Dollar, precious metals, and bonds.

Hence I am assuming, and I might be wrong, that you are trying to mix long and short-term timelines, and that is a very big no-no. We specifically separated the timelines into two sections. Everything is clearly labelled.

The general commentary is general commentary. It is to be used in conjunction with the timeline you have chosen, long or short.

The advanced trader's section is for advanced traders.


On a separate note. Have you taken a look at what has happened since COVID struck and then the Russia-Ukraine war? It has changed the dynamics of everything.

[SOL]

I'm sorry you feel that way. I am very happy with the service because it suits my style and the different objectives of my different accounts. Also I believe, what you speak of, is a sign of the times. The current environment of the markets is very touchy and I appreciate the insights into different time horizons. I look forward to each and every release. Whenever it appears.

One thing that has worked for me over the years is to have different account with different investing approaches. I have several, including a shorting account and a 3x leveraged account among the long term account and several other accounts. I am about to open one for precious metals stocks, just for grins. I am not a big shorter, but I plan on playing a few short plays as the market begins to dip. I also read every issue and while sometimes we all have to ask for clarity, it is given.

I'm considering shorting this time around, as I did briefly in 2008-2009 and had some success. However, I made sure to keep it in a separate account and waited for good setups. Mixing trading accounts can skew results. I'll include a bonus section to share my views and those of Team TI on our short-term trading activities. I won't be including these updates under the Interim updates section to avoid confusion

Recently, we've been engaging in short-term trades based on the "short-term views", published in the Market update since roughly November 2022, and our accuracy rate of jumping in and out of TQQQ, UDOW, and other securities are close to 90%. However, we all know that short-term investing is volatile and risky, so these stats may change within the next three months. Nevertheless, all short-term trades are conducted in a separate account.

[SOL]

History does not repeat itself, so we stated that the markets would likely experience something
resembling 2008-2009 and the 70's (1973-1974). As long as the NDX (Nasdaq 100) does not close
below 11,960 on a weekly basis, the short-term outlook will remain bullish.

It should have said the following: As long as the NDX does not close below 11,960 on a daily basis, I apologize for the error

[stefk]

The most important for me in TI market updates, is the big picture, for the long term view. And for me its all and enough. The market updates give you a clear picture for the long term view. Its the most important.

Dont worry for the little details. We are now at an important crossroad. Follow the trend in the big picture, and it will make bang in your wallet.

[AstuteShift]

My opinion is that the market updates are pretty clear

However each individual has a different level of risk

For example, I’d re examined my emotional state trading options and higher risk plays and saw more irritability and excessive behavior creeping in, therefore I’ve adjusted my risk tolerance

Also I’ve slowed down mobile trading. These brokers are turning trading into a casino with your mind so best to only deal with trades on a desktop or laptop where you can sit, relax and analyze the play you want to get in

It’s not about beating the market every year but rather assessing the landscape, adjust accordingly and most importantly assessing the risks of the market

The old saying goes, there is a time to sell, time to buy and a time to observe and wait.

The monthly charts are screaming great times for those who are patient

[MarkD]

At times like this it pays to have a LT perspective. I hesitate to post these charts but will do so by only stating they are monthly charts of that compare an index to an indicator which won't be identified.

The indicator is on top, index below in both charts.

https://ibb.co/QQgmnCV

https://ibb.co/wMFfcnT

I am no stock picker but I can identify a trend.

[AstuteShift]

At times like this it pays to have a LT perspective. I hesitate to post these charts but will do so by only stating they are monthly charts of that compare an index to an indicator which won't be identified.

The indicator is on top, index below in both charts.

https://ibb.co/QQgmnCV

https://ibb.co/wMFfcnT

I am no stock picker but I can identify a trend.

Indeed long term perspective is the most profitable in the long run.

In troubling times, it’s best to stick with companies with a good business model, product and of course fantastic management. Also the weekly and monthly charts should scream, pick me.

Nothing is guaranteed however that’s a good general direction to take.

[Triplethought]

Keep it simple:

Any given year, there's a greater than 75% chance that the SPX will end the year higher than it started.

It's also somewhat rare to have two consecutive negative years in the SPX.

There has never been an official NBER-declared recession in Year 3 of the POTUS cycle (2023).

From what I remember the last time I researched, the last time Year 3 of the POTUS was negative for the SPX was 1931.

Just based on those four statements above, I am overall bullish on equities this year. It sets the background rate for the context of what to expect.

Plus, I am sure you remember about the JBS - you were partially responsible for that Divine Buy Trigger. Merci beaucoup! Jesus generally doesn't lie, although His Words often get misinterpreted.

The book you referred me to with the Swiss investors rules makes the point that history should be taken with an extreme grain of salt when it comes to investing. Just because you can find patterns in history doesn't mean they will repeat. I'm overall bearish on equities this year and have been since last September (as you know). I've been wrong so far. The S&P is up 11.5% and Nasdaq 10% since oct 1. My bearishness was based both on SOL softening buy recommendations and the fact the FED is trying to slow the economy. So far you've proven "don't fight the FED" to be wrong over this 6 month window. But to me the FED, who are "spinning their wheels" so far will eventually gain traction.

If I'm understanding correctly SOL is essentially in the Bear camp in the sense he expects a MOBO event (I think this year?) which implies a significant drop in the market before the buy signal.

[SOL]

If I'm understanding correctly SOL is essentially in the Bear camp in the sense he expects a MOBO event (I think this year?) which implies a significant drop in the market before the buy signal.

I would not quite use the word bearish. I have played the long side based on short-term views published in the MU as many others have.

However, my primary focus is directed towards long-term trends. But unlike most subscribers, I and all of us at TI can deal with 50% drawdowns. Therefore, we need to be cautious and wait for additional confirmations before aggressively opening new longs.

While I thrive in such an environment, as it historically creates mouth-watering opportunities, I understand that not everyone shares my risk tolerance. During the 08-09 crises, roughly 50% of TI subscribers could handle similar drawdowns, but today the number is less than 25%. I cannot force what appeals to me onto others.

So we will wait for additional confirmations before aggressively issuing new plays. Until then our aim is to find extreme entry points on most of the newly issued plays. This approach will help minimize risk and ensure that subscribers can handle the investment's potential drawdown.

Our analysis suggests that another pullback/correction is on the horizon. In the event that this occurs, the MACDs are likely to plummet even lower and may even test or trade below the lows of 2008-2009. Given that the current market trend is neutral, such a development would inevitably trigger a MOAB (Mother of All Buy Signals) unless the pattern undergoes a sudden and dramatic shift.

Market Update March 7, 2023


To clarify, the MOAB signal is not exclusively triggered by an extreme downward move but rather by strong moves in key technical indicators, sentiment, price action, and mass psychology.

For example, it is possible for the MACDs to drop to new 14-year lows or test their 2008-2009 lows without the markets themselves dropping to new lows.

[jonnyfrank]

It is getting tough to believe that there is going to be a rally through March. Today is getting ugly fast.

[Do-or-Die]

While followers might get perished. Dreamers die even faster. From reading the posts for the past 6 months. It appears that a lot of individuals are looking for an extra nipple. For that you might need to hire the services of Personal Financial advisor and lose a huge chunk of money for well crappy advice but hey you will get the extra nipple

Nobody is going to hold your hand even the ones that you pay a fortune to. The best strategy is to focus on the risk you can handle and then use that to develop your game plan

The change in format has made it far simpler to choose one's poison. There is the long term and the short term outlook. Being that I like a little bit of an adrenaline rush I try to play both but from experience and from what other members have stated. I use separate portfolios for each venture. In my short term portfolio i have been playing the long side and doing pretty, much to my amazement . In the long term I have been building cash.

[Do-or-Die]

It is getting tough to believe that there is going to be a rally through March. Today is getting ugly fast.

The NASDAQ 100 is still holding above 11960 so there might be some hope. I closed my longs when Sol stated that the Dow should drop to the 32.5K ranges. I am waiting until 32.5K before getting into new short term longs.
Been building cash in the long term portfolio. Overall in a much better position than I was last year, when at one point i was dangerously close to pissing blood

In the meantime this image had me howling

[jonnyfrank]

While followers might get perished. Dreamers die even faster. From reading the posts for the past 6 months. It appears that a lot of individuals are looking for an extra nipple. For that you might need to hire the services of Personal Financial advisor and lose a huge chunk of money for well crappy advice but hey you will get the extra nipple

Nobody is going to hold your hand even the ones that you pay a fortune to. The best strategy is to focus on the risk you can handle and then use that to develop your game plan

The change in format has made it far simpler to choose one's poison. There is the long term and the short term outlook. Being that I like a little bit of an adrenaline rush I try to play both but from experience and from what other members have stated. I use separate portfolios for each venture. In my short term portfolio i have been playing the long side and doing pretty, much to my amazement . In the long term I have been building cash.

Well said. It seems like right now buying the dips and getting out on the rise is the play.