Updated: May 25, 2020
If anyone is wondering whether the Master Time Cycles are still working on today's markets, then my response is an "unequivocal yes!".
The debate was out whether the ultimate bull market high was due to arrive in late 2019 or early 2020. But either way, we here at the Time Factor had forecast that the end of the bull market was going to occur within this time frame all the way back in 2011 - over eight years before the event. Subscribers to my Time Factor Report are well aware of my views on this. So I am not claiming victory on this forecast with the benefit of hindsight.
Personally, I had switched 100% of my Retirement Savings into cash by the end of October in 2019 and a number of my close friends and colleagues followed. It looked like I had made the wrong call for a while, especially as the Dow Jones and the Australian ASX200 indices climbed to new highs.
So now that we are sitting in cash, when is the next "TIME" to buy. Here are my thoughts...
A quick look back in TIME, and you will quickly discover why MARCH is such an important period for significant stock market lows. You simply need to go back and revisit the last two major stock market bottoms in March 2003 and March 2009.
Now, I am fully aware that it was October 2002 that provided the actual bottom point during that bear market cycle. As those of you who have a copy of Trading with the Time Factor - vol. 2 where I discuss TIME cycles will already be aware of why October is such a significant period. But it was March that proved to be the best buying opportunity, and its significance as a TIME frame cannot be overlooked.
Now, am I saying that the low we saw in March 2020 is THE LOW?? Not quite. I'd like us to recover more than 61.8% of the COVID-19 sell off before drawing to that conclusion. And I will have more to say on that in another blog. But for now, we certainly have a reference point in the sand and something which you should be calculating your PRICE projections from.
And whilst the March 2020 low (so far) looks obvious in hindsight, the reality is, not many of us traded it. I certainly didn't it. In fact, my timing indicators were telling me that the 2nd or 3rd of April was the TIME to buy, and I only entered the market then which was about 15% off the very lows (see next chart).
But getting in 15% off a major stock market low can prove to be very, very rewarding. In my very first TIME FACTOR report, I outlined a scenario showing how a $100,000 passive investment over 20 years turned into $1,000,000 using a simple 'buy and hold' approach.
But when you included the TIME FACTOR, and avoided the 3 major bear market corrections during that time - selling out 15% before the top and buying back in 15% after the bottom - using that same 'buy and hold' approach turned that $100,000 into over $1,700,000!
I'll post that chart on this website so you can review it for yourself.
In the next few days, I will be releasing a video with my thoughts on the market and where I think we are going. It is too much to share in a simple blog. So stay tuned.
For now, we have an interim low in place and a recovery rally underway. Just be careful not to get sucked in however near the top. I'll give you my price targets in the video update.
Until next time...