Investments

[Ford]

And for anyone interested, regarding lunar trading, and the effects of the moon on the stock market, here is a brief article from Harvard and The University of Michigan supporting that finding.

http://www.freerepublic.com/focus/f-news/1748325/posts

"We find strong lunar cycle effects in stock returns," say University of Michigan Business School professors Ilia D. Dichev and Troy D. Janes in a research report. "Specifically, returns in the 15 days around new moon dates are about double the returns in the 15 days around full moon dates. This pattern of returns is pervasive," they report.

They gathered data on major U.S. stock markets over the past 100 years, and on the markets of 24 other nations going back 30 years.

"Taken as a whole, this evidence is consistent with popular beliefs that lunar cycles affect human behavior," the researchers concluded.

The Harvard Business Review, reporting the research in its current issue, says that while these findings "are a bit off the beaten path, they're the product of rigorous research."

Emphasis Harvard and market timing?

If anyone is interested, I can explain it in easy terms. It is a pattern that I have seen repeated over and over again, month in and month out. And it is pretty easy to profit from.

Like Techboy already said, correlation does not equal causality. Don't you think that if it was as simple as manipulating lunar cycles, everybody would be on to it and the advantage you supposedly have would be nullified? There are no shortcuts, there is no denying legitimate math and long term calculations -- attempted market timing will let you down in the long run. You might as well spread your risk across the market as a whole and actually invest in business rather than speculate on unpredictable short-term fluctuations. The research and data are there -- you can dismiss them as abstract thoughts of academia, but passive indexing is far and away the superior form of investing. Remove emotion and inject reason -- you'll be more successful over the long term.

[PeterMP]

I did that based upon McHugh's prediction that the market was going to drop from the open today.....150 points green, to 120 pts red....a 270 pt swing in two hours, that would afford people the opportunity to enter the long side for a big rally starting next Tuesday. Those who are unfortunately invested in mutual funds that only price once a day are not afforded such a luxury....another downside to funds as opposed to etfs.

Some people bought the market high at the open this morning, others who could read charts, or who had read McHugh, waited for the market to pull back to load long for next week's rally.

With the day low obviously in and holding.....based on the 60 minute moving average on the transportation index, it was a pretty clear sign that the rally was starting.

From my chart reading, and the knowledge that another big McHugh move is predicted to start Tuesday.....I bought in with the mkt down 60 pts, and we closed pretty postively.

You're rationalizing (which is why this sort of thing works. He was clearly predicting price drops through Tues., until the "new administration passes stimulus legislation" (which won't even happen on Tuesday).

You would have done better buying at the beginning of the day than the end, which is what you would have done based on his report.

[McD5]

You're rationalizing (which is why this sort of thing works. He was clearly predicting price drops through Tues., until the "new administration passes stimulus legislation" (which won't even happen on Tuesday).

You would have done better buying at the beginning of the day than the end, which is what you would have done based on his report.

No, I did much better by waiting until mid-afternoon.

The market was up 150 pts at the open, then dropped all the way to breakeven.

It then dropped another 120 pts into the red.

270 points lower, a little more than 3% lower than those who bought or held at the open.

I did not purchase when it was down 120, I watched moving averages, waited for a few retests of that technical low, then purchased when it was down 60.

[McD5]

Like Techboy already said, correlation does not equal causality. Don't you think that if it was as simple as manipulating lunar cycles, everybody would be on to it and the advantage you supposedly have would be nullified? There are no shortcuts, there is no denying legitimate math and long term calculations -- attempted market timing will let you down in the long run. You might as well spread your risk across the market as a whole and actually invest in business rather than speculate on unpredictable short-term fluctuations. The research and data are there -- you can dismiss them as abstract thoughts of academia, but passive indexing is far and away the superior form of investing. Remove emotion and inject reason -- you'll be more successful over the long term.

No. Most investors would laugh at such an investing strategy, although as you can see above, it has an amazing amount of merit, in markets all over the globe.

I don't use what I believe to be "shortcuts", rather trend analysis.

Nor would I ever buy the entire market for any extended length of time. Certain sectors are either great or abysmal at any given time, they are easy to spot, and no, I wouldn't waste any of my funds investing in stock sectors clearly headed lower.

We talked about that last week....and why anyone would even consider investing in financial stocks at this time.

The average financial stock was down over 20% just last week alone, much worse than the index as a whole. Several were down 35% alone. That was easy to see coming, and I noted it here.

Nor would I have recommended being invested at housing stocks when the housing market started to crash, and the same for oil stocks when oil began to crash. Why would anyone want to be invested in such high risk/low reward sectors during those times?

They wouldn't.

[PeterMP]

I do not read safehaven, and from reading about his response to that site that was trying to get viewers by bashing him, it is not where he makes his predictions. His calls are cleanly packaged into an email, consisting of 3-4 paragraphs a night.

And as I've indicated they contain much of the same info. Including in March (after it has come down from its high of just over 1,000) that it would go to 1,300 by the end of the year so his response seems very artificial.

You are forgetting the fact that he called the exact beginning of that drop down to the exact date, a phi date. The drop was over 3,000 points in ten days alone. No one else on earth predicted anything of the sort--all based on technical research.

I'm not forgetting it. Throw enough of darts at the dart board, even with your eyes closed, you'll hit the board occassionally. In his case, he's currently hitting the board a lot because he has a fundamental belief that our monetary policy is unsound, which makes him predict that the market (in general) is going to go down.

The end result is when the market goes down a lot, he's right a lot. The flip side of that is when the market goes up (July 2003-July 2004), he's wrong a lot.

And even in that context, he's still wrong enough that it is going to minimize your profits. For example, his repeated calls for a 2,000 point drop in and around Oct. 22nd, which he continued to do for several days.

If you were shorting through that period, you ended up losing probably as much as you would have gained from his previous prediction of a decline.

He isn't rooting for any collapse. His prediction now is for a multi-week rally. Certainly not bearish.

:rotflmao:

Followed by a bigger turn down.

He thinks the US is going to have to scrap the dollar (after a period of using it rebuy all of our debt (via massive printing of it) leading to hyperinflatoin)

http://www.321gold.com/editorials/taylor/taylor121808.html

(Wouldn't it just be easier to default on the debt and keep the dollar?)

The last thing you want to do is to bet against this guy. I noted in this thread Monday that I had just bought some gold based upon his, and my technical research for a short-term move up.

Give me a dollar range (a min and a max) and a day in the 2-4 week range where we'll be in that range.

I would suggest just sitting back and reading his daily reports, and I will try to add any helpful commentary. I really believe you will learn a ton that will help you financially in the present, and the future.

I've analyzed his archives enough.

It'll be like being the house against somebody betting black/red or even/odd on roulette (I actually think I can do beat those odds).

[PeterMP]

No. Most investors would laugh at such an investing strategy, although as you can see above, it has an amazing amount of merit, in markets all over the globe.

I'll look at the study, buy you can't treat different markets as statistically distinct things. They aren't independent from one another.

[PeterMP]

And for anyone interested, regarding lunar trading, and the effects of the moon on the stock market, here is a brief article from Harvard and The University of Michigan supporting that finding.

http://www.freerepublic.com/focus/f-news/1748325/posts

"We find strong lunar cycle effects in stock returns," say University of Michigan Business School professors Ilia D. Dichev and Troy D. Janes in a research report. "Specifically, returns in the 15 days around new moon dates are about double the returns in the 15 days around full moon dates. This pattern of returns is pervasive," they report.

They gathered data on major U.S. stock markets over the past 100 years, and on the markets of 24 other nations going back 30 years.

"Taken as a whole, this evidence is consistent with popular beliefs that lunar cycles affect human behavior," the researchers concluded.

The Harvard Business Review, reporting the research in its current issue, says that while these findings "are a bit off the beaten path, they're the product of rigorous research."

Emphasis Harvard and market timing?

If anyone is interested, I can explain it in easy terms. It is a pattern that I have seen repeated over and over again, month in and month out. And it is pretty easy to profit from.

You might want to consider this by one of the same authors:

"The empirical results indicate that aggregate dollar-weighted returns are systematically lower than buy-and hold returns."

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=544142

[PeterMP]

And for anyone interested, regarding lunar trading, and the effects of the moon on the stock market, here is a brief article from Harvard and The University of Michigan supporting that finding.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=281665

"This pattern exists for all major U.S.stock indexes over the full history of available returns, including the Dow Jones Industrial Average (1896-1999), the S&P 500 (1928-2000), NYSE-AMEX (1962-2000), and Nasdaq (1973-2000). The economic magnitude of this difference is large, with daily returns around new moon dates nearly double those around full moon dates. As another calibration statistic, the annualized difference between new moon and full moon returns is on the magnitude of 5 to 8 percent, rivaling and probably exceeding the market risk premium. However, due to the large standard deviation of daily returns, most differences for individual stock indexes are not statistically significant."

Looking at lot's of different markets, which means multiple hypothesis testing and no indication of a correction for doing so.

"Specifically, in the first part of Panel B we pool all data for the G-7 countries together and compute the same statistics. Essentially, this test treats all stock returns as independent observations."

Sorry, but you can't do that:

http://en.wikipedia.org/wiki/Pseudoreplication

Okay, they realize this:

"The evidence from the pooled data is simple and intuitive but is open to criticism because contemporaneous international stock returns are likely to be positively correlated."

(Then, why'd you do it in the first place?)

"In any case, we offer one additional combined specification that completely avoids concerns about cross-sectional dependence in returns. Specifically, we provide results for a portfolio, where each daily return is an equally weighted average of the corresponding daily returns for the G-7 stock indexes. Not surprisingly, the mean daily returns are very similar to those for the pooled results, with a nearly identical difference in returns of 0.033 percent. The t-statistic for the difference is 2.18, which is significant at the 0.03 level."

0.03 is mildly significant. Many people like to use the lower cutoff of 0.01, which wouldn't pass. I think it could easily be argued as they've tested multiple things (different stock markets for price, but also volume and other things, bonds and interest rates) that they should do a correction for multiple hypothesis testing (http://en.wikipedia.org/wiki/Multiple_comparisons) that would render their signficant result insignificant.

"However, the persistence results for both the pooled and the equalweighted specification are not significant at conventional levels."

"Combined with the preceding results for the G-7 countries, this evidence implies that the new moon/full moon difference is positive in 24 out of 25 examined countries. A simple binomial test rejects at a very high level of statistical significance the probability of observing such a one-sided pattern of return differences across countries by pure chance."

But you've already said they are likely to be correlated, which your binomial test doesn't take into account.

If I'm reading this right, this is another issue:

"As one might expect from the well-known properties of stock returns, both the new moon and the full moon distributions in Figure 4 are fairly bell-shaped, right 20 skewed, and have central tendencies around the 10 percent mark"

Their test are assuming a normal distribution (t-test; binomial). A right skew would artificially affect their results.

The results are suggestive maybe, but certainly not overly convincing. It also isn't clear why this would be the case:

"We investigate for lunar cycle effects in stock returns for two reasons. First,

contemporary surveys confirm that a large part of the population, about 50 percent,

believes that strange behavior peaks around the full moon"

It is possible that it isn't the moon, but people's beliefs about the moon (which this study is essentially re-enforcing, which could cause an even greater difference in future studies).

[McD5]

I'll look at the study, buy you can't treat different markets as statistically distinct things. They aren't independent from one another.

I will be on and off this weekend. I am in the process of upgrading my business, which requires me to pack boxes for the next 36 hours or so.:doh:

I do know of some other studies with similiar research......one that shows a direct correlation between the moon, and the seven worst stock days in the history of the US markets.

They all occured on exactly the same specific cycle. Published research found that the odds of such events happening were less than 1 in 179,000.

In laymen's terms, here is the general thinking behind it:

It is a scientific fact that the moon controls water on the earth. And water, (see hurricane Katrina), can be an incredibly powerful force.

During the full moon, water and the tides are at their highest. During the new moon, at their lowest.

These full moon and new moon dates vary each month, so it is not some calendar-related phenomenon.

The human body is comprised mostly of water. If the moon controls water all over the globe, can it control human behavior to any extent?

Once enough data had been gathered regarding the full moon, and its effects on many different things, analysts decided to put that test to the stock market. To see if the full moon and new moon would have the same power over human investing, as it does in other parts of their lives.

Police departments report a huge increase in arrests, duis, and generally heightened levels of lawless behavior around full moons. And the exact opposite around new moons. Hence, the origin of the saying "It's a full moon, or The freaks come out on the full moon."

Animals also take their cue from the moon--pregnancy rates are accelerated greatly during this period.

There are many studies regarding all of the above, and the power of the moon.

Anyway, to break it down to its most simplest terms--the market almost always peaks on the full moon, and then sells off sharply over the next few days.

Those effects are most prominent on the exact full moon date, and then the days immediately thereafter.

The opposite is also true: Stocks bottom on the new moon, then tend to rise sharply for a few days after.

"Buy the new moon, and sell the full moon"

In the near term, I will show you in real-time as these dates approach, and you can see the results with your own eyes.

The study that Harvard noted in my previous post studied every day in the month, and determined that investment results could be doubled by using this strategy. I would suggest that the returns on the dates even closer to the exact new moon and full moon would be much, much higher than simply 2:1. I would give an estimate of more like 6:1, or even 8:1.

Exactly why this occurs over and over again, in nations all over the globe, over such an extended period of time is not my exact concern. No money is made by determining the specific answer.

Recognizing this trend however, and exploiting it is profitable.

[PeterMP]

Exactly why this occurs over and over again, in nations all over the globe, over such an extended period of time is not my exact concern. No money is made by determining the specific answer.

Recognizing this trend however, and exploiting it is profitable.

I've got bad news for you. Even they say,

"Similar to the Monday effect, the nature of the lunar cycle effect in returns makes it unlikely that it will translate into exploitable trading strategies."

The ability to find a relationship doesn't mean you can profit from it. They are able to look over LONG periods of time (longer than you can invest), over large numbers of transactions (essentially all the transactions over the whole world) to find an effect.

Given that data set, that doesn't mean you can profit from it on a personal basis (your number of transactions being much smaller than those that make up the whole world) in your investing time period, especially, when you figure the fees you have to pay to trade.

[McD5]

I've got bad news for you. Even they say,

"Similar to the Monday effect, the nature of the lunar cycle effect in returns makes it unlikely that it will translate into exploitable trading strategies."

The ability to find an effect doesn't mean you can profit from it. They are able to look over LONG periods of time (longer than you can invest), over large numbers of transactions (essentially all the transactions over the whole world) to find an effect.

Given that data set, that doesn't mean you can profit from it on a personal basis (your number of transactions being much smaller than those that make up the whole world) in your investing time period, especially, when you figure the fees you have to pay to trade.[/quote]

If interested, I will show you examples of how you can profit from it over the coming months, in real-time.

For starters, simply by not being invested in the one specific moon cycle I mentioned above would have afforded you the luxury of missing the worst 7 days in stock market history.

Do you really need to be invested on those days? Is the reward worth the risk on that exact day? Could missing those 7 worst days in history improve your returns, whether a short-term or long-term investor?

With regard to the fees--fees are extremely low these days with online trading. An individual can now make a purchase easily for as little as $5, and sell for another $5.

1000 shares of an etf, even one priced at $200 per share...whatever, for as little as $10 round-trip. $200k moved for $10. They are not an issue.

The only thing that really matters is your profit, net of fees.

The only time that fees do become an issue is for a holder of mutual funds. And this factor is widely promoted by the lowest-cost funds. Partially, to convince investors to keep their money stagnant.

The downsides to that are many. Not being afforded the luxury to enter or exit a fund at any moment during the day, being forced to only accept the closing price of the day is one of them.

[PeterMP]

The only time that fees do become an issue is for a holder of mutual funds. And this factor is widely promoted by the lowest-cost funds. Partially, to convince investors to keep their money stagnant.

The downsides to that are many. Not being afforded the luxury to enter or exit a fund at any moment during the day, being forced to only accept the closing price of the day is one of them.

I love when people post a study (or a story about a study (as in this case)) to support their view, and then when the study says something they don't like explain why the study is wrong.

Essentially, the same thing happened in the video game thread.

[McD5]

I love when people post a study (or a story about a study (as in this case)) to support their view, and then when the study says something they don't like explain why the study is wrong.

Essentially, the same thing happened in the video game thread.

There isn't anything in that study that refutes what I believe can make an individual money. I have no gripes with it. I would prefer that they study not every single day in the month--but rather those specific days, and the one or two days prior of after those days. Those are the days believed to be where the moon's energy is most prominent. Not so much 8 days later.

I am not familiar with the video game thread.

If nothing else at all.....that study does suggest a very strong correlation between investment returns being more than 2:1 more favorable during a specific timeframe(albeit too wide of a time frame in my opinion).

In the real world.....if someone gave me $1000, and instructed me that I had to go put it into a slot machine on either Wednesday or Saturday this week, and I knew that for whatever reason, there was a strong correlation showing that Wednesday gamblers had twice as favorable results....what day of the week do you believe I would gamble on?

Whether their was some undisputable, scientific, clearly-defined reason for Wednesday being better or not isn't of importance. The results are.

It could be nothing more than a self-fullfilling event. Enough people believe it is true, that it becomes true. Enough of the big money managers are cognizant of this occurence, and act accordingly. Natural effects from lunar cycles and effects would argue otherwise, but maybe this is the only answer.

Whatever the reason....I am more interested in the financial results from taking such action. And there is certainly a well established pattern there.

[techboy]

This whole "emphasis mine" thing doesn't seem to be working out so well. I might consider changing it.

No, I think I'll keep mentioning when the emphasis is not the author's, but my own. I consider it good practice.

And the simple fact is, no matter how you try to spin it, he predicted that the market would "close down". It didn't. End of story. End of myth of "100% track record" (which even Dr. McHugh doesn't support).

And for anyone interested, regarding lunar trading, and the effects of the moon on the stock market, here is a brief article from Harvard and The University of Michigan supporting that finding.

http://www.freerepublic.com/focus/f-news/1748325/posts

Actually, that article is from The Free Republic. It only references the articles from Harvard and The U of M. As PeterMP noted, the actual articles themselves tell a slightly different story than that which you are telling.

I also find it highly amusing that you refuse to even address the Dichev paper I cited earlier showing a persistent, significant, and substantial outperformance of buy and hold over market timing (as well as all the other papers and sources I presented), because of some populist garbage against academics knowing what they're talking about (even though half of my sources are actually succesful investors, like Swensen), and yet you can cite this with a straight face (keyboard).

You might want to consider this by one of the same authors:

"The empirical results indicate that aggregate dollar-weighted returns are systematically lower than buy-and hold returns."

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=544142

Hmm... That paper sounds familiar...

With regard to the fees--fees are extremely low these days with online trading. An individual can now make a purchase easily for as little as $5, and sell for another $5.

1000 shares of an etf, even one priced at $200 per share...whatever, for as little as $10 round-trip. $200k moved for $10. They are not an issue.

All right, let's talk costs, because those are, indeed, important. I'll grant that you can round-trip 1000 shares for $10. But, how many trades do you make in a year? Let's be conservative and say 200 (and I'm sure that's way low for most market timers). What's that now, $2000?

Then, of course, there are the hidden costs of the bid-ask spread. Let's assume again that you only use heavy volume ETFs which have the minimum bid-ask spread of $.01 (again, a stretch in market timing's favor). That's .01*2 (in and out) * 200 (number of round trips)* 1000 shares each time. So that's another $2000.

Your costs, at a minimum, are $4000 (and probably much higher, since I made ridiculous assumptions in your favor).

My highly diversified buy and hold portfolio of index funds and ETFs has a blended expense ratio of .27%. That's actually fairly high for an index investor (I'm in some more exotic indexes like international real estate, so that tends to drive the cost up a bit), but we'll use it. Let's assume a portfolio of $100,000.

The costs for the buy and hold are $270 (and again, that's awfully high, many investors have less than half that).

Advantage buy and hold, roughly $3700 (there are a few bid-ask spread hidden expenses in my portfolio too, because I hold some ETFs, but they are minimized, because I, well, buy and hold. ).

That's not even getting into taxes. Buy and hold pays little, until finally selling, and then pays the lower 15% LTCG. Market timers pay the full income tax on every succesful trade. So, subtract 25 to 35 percent of all market timings earnings.

These cost differences are a large reason why buy and hold wins, along with the other reasons I have cited.

There isn't anything in that study that refutes what I believe can make an individual money.

The authors indicate that most of the results were not statistically significant, and that any results which were were unlikely to provide an exploitable trading opportunity.

Whatever the reason....I am more interested in the financial results from taking such action. And there is certainly a well established pattern there.

Until there isn't. Why don't the Redskins control Presidential elections anymore?

[McD5]

No, I think I'll keep mentioning when the emphasis is not the author's, but my own. I consider it good practice.

And the simple fact is, no matter how you try to spin it, he predicted that the market would "close down". It didn't. End of story. End of myth of "100% track record" (which even Dr. McHugh doesn't support).

This is incorrect. Here is his quote, taken from his email:

Very short term, the 15 minute and 30 minute Full Stochastics suggest prices couldfall Friday.

Not would.....not highly likely.....not run for your lives.

Could. Nowhere did he say the market would close down Friday. Honestly, had he said that, it would have closed down Friday.

And what he was refererring to specifically are short-term, overbought/oversold indicators, showing in his words "Very short term" not to chase the opening prices Friday morning.

He accomodates super short term, short term, medium term and longer term investors.

He even has a an ultra-conservative portfolio, for the buy and hold investor.

That ultra-conservative portfolio beat the S&P by more than 2:1 last year.

The most important call from his email Thursday night, guidance going forward:

Full Stochastics remain on a buy, and at a level where multi-week rallies occur, so this short-term decline, which is probably the remainder of B-down, should be measured in hours or days, not weeks or months. The Monthly Full Stochastics are arguing there is another up leg coming that lasts several weeks. The next up leg should be wave C-up of ( up. The point here is that probably by early next week, around inauguration day, the technicals should be harmoniously set up to see a rally that lasts several weeks.

[McD5]

All right, let's talk costs, because those are, indeed, important. I'll grant that you can round-trip 1000 shares for $10. But, how many trades do you make in a year? Let's be conservative and say 200 (and I'm sure that's way low for most market timers). What's that now, $2000?

I will respond to these shortly. I just had a response written out, and it deleted while on the phone at the same time.:doh:

Basically, some of those you mentioned apply to me, some do not.

The bid/ask is a concern only to those naive enough to use market orders. In 90% plus of transactions, I am the bid when buying, or offer when selling. Not a factor.

I also use the bid/ask spread as an advantage. There are several stocks that hardly ever move, lower volume slugs.

6 by 6.40, yet the stock never moves, yet trades at both prices nearly every single day.

I will bid 6, then offer 6.40 once filled.

I do understand that the average investor isn't that sophisticated however.

With regard to taxes......those will vary on each investor. There is no denying that LTCG are better than short term, but they can be managed.

Many foreign accounts pay no capital gains taxes on US stock market profits of any sort.

US retirement accounts, where investors pay no gains until money is withdrawn will also skew those numbers you mentioned.

And finally, commissions are the least important factor in investing. If your strategy is incorrect, you will lose money regardless.

If I can give someone 100k, and a week, or even a month later it is 110k, how much it cost to make that money is of no concern. The end result is.

Many investors get fooled into the attraction of low costs or commissions. And many will accept poor returns in that endeavour.

I prefer to look at the net result.

If you had a $100k car, would you put $100 tires on it, then drive 100 mph down the highway? Of course not.

Yet people do that with their life savings stock accounts, much more important than any car they may own, and somehow believe it makes sense.

It is reckless imho. The limitations of mutual funds greatly outweigh any tax advantages of investing in them, at least in my eyes.

[PeterMP]

Whatever the reason....I am more interested in the financial results from taking such action. And there is certainly a well established pattern there.

I'll take that action too.

http://aa.usno.navy.mil/cgi-bin/aa_moonphases.pl?year=2008&ZZZ=END

Pick whatever window in time and index you want and the lower value percent up or down associated with that window in time for that index you expect to see (assuming that lowest value percent change would make sense to change your trading habits over those days) for the remaining dates this year (you can even select different percentages and different windows for different days), and I'll take the field (i.e. that you are wrong (or at least wrong more than 1/2 the times)).

By my count, we are talking about 24 days.

(p.s. for the last decade the average for the DJIA; (the open two days after a new moon (that is if the new moon is the 8th; then the open of the 10th)/the open the day before the new moon) is 1.003226 the same number for a full moon is 1.005127.)

Other markets that I have data for are similar.

[PeterMP]

This is incorrect. Here is his quote, taken from his email:

Very short term, the 15 minute and 30 minute Full Stochastics suggest prices couldfall Friday.

Not would.....not highly likely.....not run for your lives.

Could. Nowhere did he say the market would close down Friday. Honestly, had he said that, it would have closed down Friday.

And what he was refererring to specifically are short-term, overbought/oversold indicators, showing in his words "Very short term" not to chase the opening prices Friday morning.

He accomodates super short term, short term, medium term and longer term investors.

He even has a an ultra-conservative portfolio, for the buy and hold investor.

That ultra-conservative portfolio beat the S&P by more than 2:1 last year.

The most important call from his email Thursday night, guidance going forward:

Full Stochastics remain on a buy, and at a level where multi-week rallies occur, so this short-term decline, which is probably the remainder of B-down, should be measured in hours or days, not weeks or months. The Monthly Full Stochastics are arguing there is another up leg coming that lasts several weeks. The next up leg should be wave C-up of ( up. The point here is that probably by early next week, around inauguration day, the technicals should be harmoniously set up to see a rally that lasts several weeks.

You notice, he's also not saying that the market WILL go up.

"Very short term, the 15 minute and 30 minute Full Stochastics suggest prices couldfall Friday."

"The next up leg should be wave C-up of ( up. The point here is that probably by early next week, around inauguration day, the technicals should be harmoniously set up to see a rally that lasts several weeks."

Is there a code or a scale that is used to differentiate the differences between should, could, and will?

Even your claims about Jan, 6 (I can't find the exact quote that you put in your post "However, what is clear is a decliningtrend has started. The Daily Full Stochastics triggered a new sell signal Tuesday, and many or ourproprietary indicators did also. The Daily Full Stochastics have further to go before bottoming, so this declining trend could last a week to 10 days or so." in his archived report from Jan 6th), isn't WILL:

"The Daily Full Stochastics are approaching a top. We show this in the charts on page 8. What this means is a two week plus or minus decline should start by the end of this week."

[techboy]

This is incorrect.

No it isn't. You quoted the wrong part.

Last night's email said "The market on a super-short-term basis(today) can pull back some from the open, and close down."

What else could "close down" mean but that the market will close down? Not down for a while, but ultimately up. Down.

Unless you're going to play the "could", "would", "should" qualifier game, which renders all of these "predictions" no better than horoscopes. Crow when they're right, make excuses when they're wrong. Confirmation bias reigns.

John Kenneth Galbraith's quote is making more sense all the time:

"The only function of economic forecasting is to make astrology look respectable."

[zoony]

zoony's market prognostication for Monday (if you'd like the newsletter, let me know, I'll put you on the mailing list). Ahem:

The market could start higher. I predict a rally at some point, though it could be in a downward direction. Or not. But definitely at some point it will gain, then lose. But maybe not on Monday. On Monday, I look for the DOW to finish up overall, at least when compared to my definition of down. Specific strategy? Buy and sell at the right time, and you could do well. Good luck.

[PeterMP]

zoony's market prognostication for Monday (if you'd like the newsletter, let me know, I'll put you on the mailing list). Ahem:

I predict the market is closed Monday.

But your prediction might be valid for Tuesday.

[zoony]

I predict the market is closed Monday.

But your prediction might be valid for Tuesday.

duh- I didn't say this monday!

[McD5]

You notice, he's also not saying that the market WILL go up.

"Very short term, the 15 minute and 30 minute Full Stochastics suggest prices couldfall Friday."

This isn't nearly as confusing as people are trying to make it.

The big, big picture per McHugh:

We are obviously in a bear market. He is predicting one more move up, to the 10,000-10,500 range.

After that, his charts suggest a serious crash lower, an extended bear market. The downside target on that number at this moment is 5k to 6k. As events unfold, he will likely not only give you the top number within 100 points and a 3 day window, he will also give you the eventual bottom within 100 points and a 3 day window. As documented, he has done it time and time again.

The confusion seems to be with what people believe are contradictory, or Barnum and Bailey type statements.

They aren't, you just need to look at what he is specifically saying, and to learn the terms a little more.

Stochastics in the market is a timing tool. It shows when the market is overbought, and when it is oversold. Nothing more.

It is possible for a market to be oversold on a weekly or monthly basis, after weeks and weeks of nonstop selling, yet on a 15 or 30 minute window, to be the exact opposite--to be very overbought. For example, if the market had been up 3 straight days, after 3 months of straight selling.

In Thursday night's report....he once again painted the big picture, giving everyone the exact date the the next big market leg up would begin. Next Tuesday.

At the same time, he said that the 15 and 30 minute stochastics were sharply overbought after Thursday's move up in the market. And suggested that a straight up move Friday would not be sustainable.

A sustainable move won't be possible until next week.

The market opened sharply higher, then dropped 270 points, over 3% in a period of only two hours. Just like he had said for the day.....the market was very overbought on a super-short term basis. And it proved to be correct.

There were several tangible, financial benefits to this advice Friday morning.

1. Sell stocks at the open, or at aleast wait for a better entry later in the day. You could have saved up to 3 1/2% on an average portfolio. 7% on a 2x etf. 10 1/2% on a 3x etf.

2. Don't be afraid of the market pullback. Unlike the last week of market action--which he had already correctly preditcted, Friday would be different. Investors were not to panic, or to believe any selloff would continue. Any dip would be a buying opportunity into a large, multi-week rally commencing next Tuesday.

On another note....I am still packing boxes, but just noticed on cnbc that out of 34 different market sectors.....Gold was the top performer last week.

While the rest of the market dropped 10%, and bad sectors dropped even 20%, gold actually went straight up.

As noted, not only did I short the market as a whole.....but the sector I went long happened to be....can you guess it? Wait....it's coming.......it's coming.....Gold!

Now....did I just throw a dart, and hit both the short market bonanza....and I also hit the top performing sector long out of 34 while 99% of people lost their ass? Both positions posted here last Monday?

Hmmm.....or maybe it was because of technical analysis? Couldn't be that, right? That stuff is a total myth.

And if the market moves up 1,000 points starting on Tuesday....does everyone have their random theory excuses already prepared?

Doubters...you are in good company. I have personally seen at least 200 different people question McHugh specifically. I have seen thousands question the merits of technical trading. Smart people. Scientific minds....and big money investors. Huge skeptics. They now subscribe to, and follow him.

heh....get ready for a big week people. We should have some fireworks next week.:applause:

[PeterMP]

And if the market moves up 1,000 points starting on Tuesday....does everyone have their random theory excuses already prepared?

EXACTLY.

Being once in a while isn't impressive w/ the number of predictions he's made. I've already outlined multiple BADLY wrong calls in this thread, including EVERY WEEK FOR A YEAR (except once) saying the market was most likely to decline or substantially decline in the next 12 weeks in a year that the market ended up being up 1,000 points.

(and I've also pointed out multiple errors in 2008, including a 2,000 point drop that never came in Oct.)

[McD5]

Sold my gold Feb $83 calls + 91%.

Financials down hard again.....holding back the mkt so far this am.