A Time To Buy

In the history of my AllAllan blog, I have yet to venture into the space-time continuum known as market timing. Naturally there was good reason to stay away from that disaster-in-drag, mainly, I hadn't a clue. That has changed somewhat, with the discoveries set out in Paradigm and reported here.

If you will review the Paradigm Blog and the signals listed on that page. this will make a whole lot more sense. Those signals represent a monthly or intermediate analysis of cyclical forces. Note that every Spring there is a Buy Signal, as there is a Sell Signal every Summer, a Buy Signal every Fall and another Sell Signal every Winter.

When I ran the analysis in the QQQQ, going back six years, these signals have been 86% accurate, with the winners swamping the losers, 16% for the average winner versus 1.7% for the average loser.

With that as an introduction and hoping that this motivates some of you to look a little deeper into the work of Robert Taylor
the markets are now in what we can call the Spring Buy Window. I would also add that the price action and sentiment of the markets and its participants, sucks. Ask yourself, when does that happen, at highs or at lows?

The third leg of this timing analysis is taxes. I sold stock this past month to pay my taxes, and if I was doing it, so were a lot of others. The other side of that coin is that at the same time people are selling to pay taxes, they are also funding retirement accounts to reduce the sting of those taxes. So there is a flow of funds going into the equity markets, maybe a massive flow, which may account in part for the Spring rallies we see in those Paradigm Signals.

For the first (and maybe the last) time ever, AllAllan is issuing a Buy signal. There is no shortage of stocks that we have talked about in the past four months that are primed to participate in any ensuing market rally. Personally, in addition to buying some more of our stocks, I will be buying some deep-in-the-money index calls, probably the SPY and QQQQ's with at least three months before expiration.

One more comment about these signals: Of the four seasonal signals, the Spring Buy is the weakest, averaging about 6% versus an overall average of 16% basis the QQQQ signals. Still, knowing that there is an 86% expectation that the markets will be about 6% higher in the next few months is worth something........isn't it?

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