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Use Barron’s Magazine Cover as Market Barometer

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), NYC, QQQ, SPY

It is important to correctly time the market, especially for peaks and troughs so that one could escape without scratches and jump back in to maximize the profits. One way to do it is through magazine covers. Use the recent Great Recession as an example. This time, I try to do it via Barron’s magazine. For folks who don’t know Barron’s very well, it mentioned that the Hindenburg Omen has happened twice in June 2008 in its first July issue that year, couple of months before the cliff drop triggered by the downfall of Lehman Brothers.

Here is the chart of Dow Jones Industrial Average Index from Feb, 2009 to May 7th, 2009 (chart courtesy of StockCharts.com).

Dow at May 8th, 2010
As we can see, the timing has been perfect. After the bull smashed to the ground in March 9th, 2009, the market took off big time. As the bear hit by a bus driven by the bull, the market started the recent correction. When the bull was threatened by the bear claw, the market closed the recent week with a 2% gain after a 400-point jump in Monday.



Disclosure: short finance, long vix

Disclosure: short finance, long vxx