If you think the market is weak, you haven't seen anything yet! The MomentuMonkey model just flashed a SELL signal after today's close.
I appreciate your interest in the Model. I have been successfully using a variation of this model in one form or another for the last twenty years. It correctly predicted almost every major market turn since I've been using it. It predicted the 1987 crash and many other turning points.
The model started out as a valuation model that used the yield curve compared to the earnings yield. In its early days, the model worked very well...the market sell off would occur within days of flashing a signal. However, in 1987, it flashed a sell signal in April that lasted until October before a buy signal was established. Worse, the original model has been negative on the stock market since December of 1997. Clearly, there needed some adjustments to today's market environment!
In the fourth quarter of 1999, I made some serious adjustments to the model. I added a growth valuation and a momentum component. I also added a US dollar adjustment. Since that time, there have been no buy signals. But the new model is very sensitive to changes in price and earnings momentum and it will change to a buy signal much earlier than the previous model.
For your information, I put my money where my mouth is...
90% of my personal wealth is in the Rydex Ursa Fund (a fund that shorts the S&P 500 Index) and I have been making money with the model.
Please have patience and you will see. I do not have to prove my system to anyone since I don't sell it. Besides, any model that was successful in the past is not likely to continue to work in the future if the secret of how it works is let out!
I respectfully ask your permission to publish my model on a daily basis. It is a service to your thread readers and it is very much on topic. No one can accurately forecast the market, as it is a moving target. My model changes daily because the underlying factors (especially momentum) change daily. The target price you see is the price I would cover my short position given all the other factors remained the same. One thing my model will not do is to whipsaw investors with fast buy-sell decisions. The model has been negative since December 1999 with no buy signals. I have been short since that time.
FYI -- I have noticed that most of the sharp drops in the market occur when the target price is lower than 15% of the current market value (like it is today).
If the stock market has a serious rally by the end of this week I will gladly quit posting on your thread and go away! But if the market has a serious decline, I would hope you would eat this "spam" and become a MomentuMonkey fan!
To see the latest model, please click on go.to
David Lee Smith |
