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Jeff Pierce
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I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
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tradewithZEN
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  • Market Timing Signal - Down 3 comments
    Jan 30, 2014 1:20 AM

    By Jeff Pierce

    2 Out of 3 of the markets I cover are now bearish for my market timing signal. The Dow flipped on Jan 24th and the Nasdaq on Jan 27th, wihile the TSX remains bullish. Caution is advised against opening new positions, especially if you trade momentum stocks as they can get hit the hardest. The last 4 times my timing signal turned bearish it was a strong buying opportunity. It's never easy to buy into selling but if you use discipline and target stocks that are being taken down with the overall markets and remain in bullish uptrends you could be rewarded.

    All is not lost if you are a bull as even with the recent selling we're not that far off the highs and we really needed some sort of pullback as the markets were getting frothy. My twitter stream has few bulls left and the headlines on my news sites are starting to become downright ominous. It's not cause to hit the panic button yet, but it definitely is time to be sure your exit strategies are in place, especially if we get a weak market bounce.

    &

    Themes: Market Timing
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Comments (3)
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  • So how do you use your system if sometimes it's a contrary indicator? ("The last 4 times my timing signal turned bearish it was a strong buying opportunity"). Guess I'm confused.
    30 Jan, 02:00 AM Reply Like
  • Author’s reply » I've adjusted my own trading to account for the Fed's aggressive monetary policy. I used to go short & sell my longs when my timing signal turned bearish. Now what I do is stop buying longs for the most part (at least momentum names) and start to look for names that are on my watchlist that may be taking a beating but the long term trend remains up (like TSCO LEAF GOMO).

     

    Basically we are in an unnatural market and have to account for that. Eventually we'll get back on tract but in the meantime as a trader one has to adjust strategies to go with the flow.
    30 Jan, 11:20 AM Reply Like
  • Author’s reply » Great question by the way. In my head I know what I'm doing but i guess I didn't convey my thoughts properly.
    30 Jan, 11:21 AM Reply Like
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