Paradigm is a novel written by Robert Taylor, published by Savas Beatie in 2006. It is the story of two brothers who discover the holy grail of stock market timing and then are chased across Europe and the United States by powerful dark forces who already had discovered the secret and are not too happy about sharing it. It's 600+ pages were a quick and entertaining read and I recommend it to those of you who enjoy reading and in particular, enjoy reading about anything related to the stock market.
Here's the catch: It's not entirely a work of fiction. The storyline is make believe, but the holy grail, according to Taylor, is real. Wait. It gets better. It's for sale: http://taylortrends.com
I wrote the author and asked for some back data so I could check it out for myself. I received six years of charts with the author's methodology superimposed upon a chart of the S&P 500. I then subscribed to the timing service and checked all the previous timing signals, as far back is the web site went, just to make sure that the dates were authentic.
Does it work? Here are my hypothetical results, you can decide for yourself. All dates are based on the monthly mid-points, i.e. if a high or low was set for June, I chose June 15th for the date of my hypothetical trade. I also used the SPY (rounded to nearest whole number) for prices, although the timing would work for any general market tradable.
Those are some impressive signals. The average gain per trade signal is 7.5% basis the SPY. But when applied to the Double Beta Funds (2X the market gains) of Pro Funds, the average trade signal jumped to 11.87%. When applied to deep-in-the-money SPY options, the average trade signal was close to 100% for three-month options.
There is reason to be skeptical of any methodology that claims to be able to time the market. That reason is that so many of us have been trying for so long to time the market without success, it is easy to conclude that it just can't be done and that these posted trade signals are too good to be true.
Unless, of course, they're not and this is indeed, the key to the vault.