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Welcome to MarketTechnician.com!

We provide professional tools for timing the stock market. While it is undoubtedly hard to time the market, we believe that it is possible. Consider what is at stake. Since the summer of 1998 the stock market as measured by the S&P 500 has gone precisely nowhere as you can see in the top clip of the chart below.

12 year weekly chart of the S&P 500 chart here with a red horizontal line drawn from the June 1998 peak to the right

However, during this period small- and mid-sized stocks outperformed and delivered positive returns to those who were aware of the trend.

The standard argument against market timing asks the question: "What would happen if you missed the best n-days because you were out of the market?" We think that the other side of that question is even more interesting to investors, so we did a study of it.

Study period, 20.1 years
1 January 1990 through 12 February 2010
200 worst and/or best days excluded
Approximately 10 (20) days per year
  • All days included, $100 becomes $304.33
    Gain at annual rate, 5.69%
  • Miss the best 200 days and $100 becomes 87 cents
    Gain at annual rate, -21.00%
  • Miss the worst 200 days and $100 becomes $134,251.48
    Gain at annual rate, 43.06%
  • Miss both the best and worst days and $100 becomes $385.53
    Gain at annual rate, 6.94%
  • Missing either the best or worst days reduces variability by 15%
    Missing both the best and worst days reduces variability by 35%

Clearly the potential rewards of market timing are worth the effort.

Enjoy and prosper,

John Bollinger, CFA, CMT

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