On April 5, 2006 I wrote a review of Paradigm, a novel written by Robert Taylor which discloses a market timing model based on natural earth cycles. As I indicated in my review, Robert Taylor maintains a web site that tracks those cycles and issues market forecasts based on the theory he espoused in his book. It is an engaging theory (and novel) and I have been closely following the forecasts for the past four months.
What follows below is a track record of the forecasts as I have been interpreting them. Interpreting is a little misleading, as for the most part they are set out clearly and succinctly, in an easy to follow and tradable manner. But there is some leeway in exact entries and exits, so to be consistent, I based every one of these trades on buying/selling the Open on the day indicated in the forecasts as a likely change in trend. In other words, the trades below can be considered, "give or take one trading day," in about half the signals.
All signals are based on the DIA, the Dow Diamonds which is tradable in and of itself, although I prefer the near term at-the-money options for leverage.
BUY April 15 111.31.....+1.94
SELL April 24 113.25.....-0.41
BUY April 28 113.66.....+2.17
SELL May 9 115.83.....+2.13
BUY May 17 113.70.....-1.26
SELL May 26 112.44.....+1.19
BUY May 31 111.25.....-0.95
SELL June 18 110.30.....-0.29
BUY June 22 110.59.....+1.63
SELL June 30 112.22.....+0.88
BUY July 12 111.34.....+0.16
SELL August 1 111.50.....+0.44
BUY August 11 111.06.....+2.39
SELL August 18 113.45.....+0.25
BUY August 24 113.20.....+1.42
SELL Sept 5 114.62.....+0.48 (open)
BUY Sept 8/11
*Sixteen trades in 17 weeks.
*Twelve wins, four losses = 75% winners.
*Average DIA points per trade, 0.76.
*Average option pro forma, based on 0.76 DIA pts per trade, about 40%.
This represents some pretty good timing and you can find out more about it at the Taylor Trends web site. My understanding is that the forecasts are posted free to anyone who reads the book.
The above trades are based on the shortest term time model, one of three timing models that are based on the cycle methodology. The medium term model I already highlighted in my original blog, but those signals were all backtested. The above signals were real time. Finally, based on the forecasts of the other two models along with the one above, we are about one month away from one hell of a BUY SIGNAL.
One hell of a Buy Signal, kind of like the way that sounds.