Blind Studies Validate Our Investor Tools

By Mike Turner

Dear Friend,

I know, from firsthand experience and from feedback that I get from my subscribers, that the CycleProphet Investor Tools (Equity Forecaster, Equity Analyzer and Market Forecaster) are the best tools on the market at any price. But, just saying that doesn't make it so, I completely realize.

As such, I asked our intrepid development team to run some blind studies on how our tools have done over the past three years when it comes to timing when to buy, when to sell, when to sell short and when to cover. Below, right, are the results.

You'll have to pardon me if I gush a bit with pride on just how significantly great the results of this analysis have turned out.

Currently, we have 5,343 stocks and ETFs in our database. The analysis covered the last three years, which as I know you know, has been, for the most part, a raging bull market. You would expect the results to be pretty good, but even I was surprised at just how good.

To put these stats in some kind of context, I had the programmers compare as many results as possible to a simple buy-and-hold strategy. After all, if the market has been going up for three years, a buy-and-hold strategy should be tough to beat. But, we did way better than just beat the buy-and-hold approach... we crushed it.

With CycleProphet's trade-timing signals, we saw nearly 10 times as many equities generate 500% or more in profit over the past 3 years; over 5 times as many equities generating 200% or more than buy-and-hold; over 3 times as many doublers (100% or more gainers) than the buy-and-hold crowd; and a staggering 99%+ of all the stocks in our database had positive returns over the past 3 years compared with only 79% of the buy-and-hold strategy... again... in a strong bull market.

It gets even better... Over 61% of all the blind trades made based on CycleProphet trade-timing signals were winning trades. Add to this that the average winning trade was well over twice the size of the average losing trade.

The stats team also worked up the results of the S&P 500 stocks and our Top 100 Stocks, just to show some different views of the performance. If you are not using Equity Analyzer's buy/sell signals to trade, you are missing out on a very powerful and very profitable tool.

Now... Just in case there is a skeptic in the audience (and you know who you are) and you are thinking, skeptically of course, that these incredible stats are in a raging bull market... so what happens in a raging bear market?

Of course, 2011 wasn't exactly a bull market with the S&P dropping nearly 18% between April and August of that year... but it still wasn't an 'official' bear market.

Keep this in mind... In a bear market, the buy-and-hold strategy will be decimated in most positions other than inverse ETFs. However, my system will take advantage of shorting opportunities PLUS the inverse ETFs. I would expect my system to produce even better results in a comparison between trade-timing and buy-and-hold, in a bear market.

We will likely get the opportunity to test that theory in the future, but I am convinced the theory will be proven to be accurate. At this point, we will just have to wait for a bear market to see how my tools perform, but since my tools do not care what direction the market is moving as it makes buy/sell/short/cover decisions based purely on trend analysis, I do not expect the overall performance to be much different; again, other than in comparison to a buy-and-hold strategy, which we should significantly outperform.


My Take on the Market...

Quote worth Quoting Again

"You cannot bring prosperity by discouraging thrift. You cannot help small men by tearing down big men. You cannot strengthen the weak by weakening the strong. You cannot lift the wage earner by pulling down the wage payer. You cannot help the poor man by destroying the rich. You cannot keep out of trouble by spending more than your income. You cannot further brotherhood of men by inciting class hatred. You cannot establish security on borrowed money. You cannot build character and courage by taking away man's initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves."...


Rev. William J. H. Boetcker

With the historically worst month of the year coming up (September) and all the machinations regarding the way overblown saga of on-again-off-again Fed tapering; not to mention the market roiling potential of employment numbers (or lack thereof) and a myriad of other domestic and geo-political events, this coming September just might be one of those months you're going to wish you had skipped.

So... if you said, "I think I'll take my profits and sit on them for the month of September," I'm not sure I would argue with you...

But, I don't plan to sit out September... not unless my exit rules are triggered; and, they certainly could be triggered.

In my Signal Investor portfolio, I am about 96% invested and with the neutral (nearly equal number of bullish and bearish indicators), I don't believe I want to replace that last 4% with anything but cash.

In my money management long/short portfolio, I am a little over 50% invested. My only short position is TBT, which is a short play on bonds. It would not surprise me to see TBT more than double over the next few years as interest rates will likely move higher in spite of the Fed's attempt at rate manipulation.

Today, I did a little back-filling in my Sabinal One portfolio. I increased my holdings in FLT, where I am up nearly 20%. I also took a small short-biased position in UDN (an Inverse ETF on the US Dollar).

Otherwise, I am in a wait-and-see mode. No need to panic and head to the sidelines and no need to put a lot of money in play right now. Watch your stops and make sure they are at least as tight as Equity Analyzer recommends.


The Bull/Bear and CrossOver Oscillator Report...

The 4-week slide toward a growing volume of Bearish signals appears to have tapered just a bit this week. The Bull-to-Bear ratio is virtually dead-even with a very slight nod to the Bulls. As such, I am leaving the Bull-Bear Rating at a [ - 1 ].
The black line (sum of both new long signals and new short sell signals) continues to project a move below the red line (new short sell signals) by the end of the month. With only one week left in this month, we would need to see a strong Bullish market to get the crossing to reverse and the black line move back up above the red line.
Therefore, I suspect the pull-back in the market is definitely in play. The question now is, how much more will it pull back... if any. The current pull-back is about 3.9% and that may well prove to be all the pull-back we are going to get in the near-term. But, it wouldn't surprise me to see another 2% sell-off before getting back on a Bullish trend.
The time-cycle bias forecast charts for the broader markets are not nearly so Bullish this week with only the Russell 2000 and the Nasdaq indicating an upward bias in the market this week.
The S&P 500 forecast shows a Bearish bias for the next 90 days and the DJIA shows a Bearish bias through the middle of next week; but, then it shifts back into a Bullish trend for a little over a month.
Putting it all together... This could be a good week to do nothing but keep your stops at just below the Expected Move for each position or even a bit tighter. It is still too early to move out of a Bull-bias and into a Bear-bias, although keeping an eye on the Buy Signals in the inverse ETFs, via the Equity Screener, might be worth a little effort.

Turner Bull/Bear Forecast
For the Upcoming Week

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The Turner Bull/Bear Forecast™ provides a one-week directional forecast on the market, with [-5] being the most Bearish and a [+5] being the most Bullish. This is predicated on the ratio of number of new Buy Signals to the number of new Short Sell Signals for the previous week. The assumption is investors are becoming more Bullish the more lopsided the ratio becomes in favor of new Buy Signals; and, the converse is true; the more lopsided the ratio becomes in favor of new Short Sell Signals, the more Bearish investor sentiment.

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The Turner CrossOver Oscillator™ provides an indication of the over-bought or over-sold condition of the market. The red line (New Short Sell Signals) shows a technical direction and strength (or lack thereof) of investors to push stock prices lower, triggering new Short Sell Signals. The higher the Short Sell Signals line, the more Bearish the market. The black line (Composite of both Short Sell and Long Buy Signals) is the combined impact of both the new Short Sell Signals and the new Buy Signals and is an indication of the degree of oversold or overbought condition of the market. Buying opportunities exist when the Composite of Signals line is moving higher. The higher this line moves, the more Bullish the market. Market bottoms are represented by a change in direction of the Composite of Signals line from moving lower to moving higher. Market corrections become much more likely when the Composite of Signals line crosses the Short Sell Signals line from below the Short Sell Signals line to above the Short Sell Signals line. The market is represented by the green shaded area.


September Trading Room Open for Reservations

Last week, we finished a great 4-session series of live trading. The class completely sold out. Everyone had a great time and Q/A was intensely fun. We netted some serious profits in our trades, which was certainly one of my goals.

Due to the fact that the August class filled up quickly, several folks missed the opportunity to attend. Now is your chance to get into September's 4-session series. Don't wait, though. I only take 10 students at a time as I want to be sure to have enough quality time for specific questions.

Here is how it works...

Starting on September 9 and for four consecutive Mondays, we meet online in "Mike's Trading Room". Each class starts at 10:30 am and lasts for about an hour. During that hour, I will walk you through my exact process of trading. I will pick up to three different trades where I will put the trades on in real time. I will explain my process for getting into each position; how I go about selecting a stock or ETF and how I set my entry/exit strategies. This is your opportunity to work, side-by-side, with a professional and very successful trader. I will do my best to teach you as much as I can to help you up your trading game.

The cost is $500 for the series, but my goal is to provide you with smart trades that will more than offset your cost of tuition. Here is the link to sign up: Mike's Trading Room (LIVE!)

Come join me for a great learning experience and have some fun trading with me and my team in my Trading Room!


Signal Investor Portfolio...

I'm 96% invested, as mentioned above, and not overly excited about adding any more to the portfolio. Remember to look at the stops, which are updated before the opening bell on Monday mornings.

My best position is BIDU, which is up over 38%. FLT (FleetCor Technologies, Inc.) is a close second, now up over 34%. In fact, 60% of my holdings are in double-digits, with an average gain of +17.34% for all 15 tickers. I am consistently beating the market, virtually every day, with these holdings. Most of them have stops above my basis, so my profits are virtually locked in even if the market takes a turn lower in September.


Closing Thoughts...

This is a great time to take profits and move to cash for a few weeks if you are risk averse.

I have no idea what the market will do if the political impasse occurs (if it occurs) regarding the de-funding of Obmacare. I have no idea what the market will do if our President does more than blur the red lines in Syria. I have no idea what the market will do if any one of a dozen significant and exogenous events occur in the next few weeks.

But one thing I am certain about... I know that my exit strategies are in place for any market event. I know that my trade-timing tools will tell me when it is time to move into inverse ETFs. And you can rest assured that I will keep you posted on exactly how I plan to incorporate these rules in my trading strategy.

Another thing I am certain about... I know that not knowing what the markets may do in dire circumstances is not cause for worry or panic. The beautiful thing about having a rule for every market condition is the rules protect my stock market investments and those of my clients from undue loss; and those rules will recommend when it is time to move from a bull-market mind set to a bear-market mind set.

My advice to you is simple... Make sure you have rules... make sure you use those rules... and make sure you don't panic or become emotionally unstable when/if the poop hits the fan when you least expect it. If you are steady, determined, disciplined and rules-based, you will do fine in any market.

Have a great week in the market!

Your rules-based-and-sleeps-well-at-night portfolio manager,

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Mike Turner

Founder and President
CycleProphet, Inc.

P.S. If you'd like to know more about CycleProphet tools, or to subscribe, click here:  https://secure.cycleprophet.com/subscribe/

IMPORTANT!

This letter is informational only and is NOT a recommendation to buy or sell securities. Any suggested trading strategies may or may not reflect trades that I plan to make in my personal accounts and/or may be similar to trades I have made or will make in the management of my client accounts. In this venue, I do not know your financial situation and I am NOT your financial advisor. As such you should NOT attempt to buy or sell any securities mentioned in this letter unless you first obtain the advice of a trusted professional financial advisor. Buying or selling securities involves risk which often results in significant financial loss. IF YOU BUY OR SELL A SECURITY BASED SOLELY UPON INFORMATION PROVIDED HEREIN, YOU WILL MOST LIKELY LOSE MONEY.

CycleProphet, Inc., 10002 Glencarrie Lane, Austin, TX 78750 (1-888-628-5556)





Posted 09-04-2013 1:50 AM by Mike Turner
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