--> How is your stock market timing? Do you know when to buy and sell?

How is your stock market timing? Do you know when to buy and sell?

Traders and investors typically subscribe to our popular Wagner Daily newsletter for one of three reasons:

  1. To receive our best technical stock and ETFs trade setups with clear and predetermined entry, stop, and target prices
  2. To learn the proven trading strategy we have been teaching to thousands of successful traders since 2002 (via our newsletter, Live Trading Room, and Live Q&A Webinars)
  3. To trade their own stock and ETF picks, but to simply know when to be in and out of the stock market overall – our market timing system

The first two items above are pretty self-explanatory, but one element of trading success we don’t talk about enough is the importance of having a consistently winning market timing system. This means having a rules-based system for determining when to be heavily buying the market, when to get out of the market, and even when to (optionally) sell short. While traditional long-term “buy and hold” investing enables one to firmly capture solid gains in uptrending markets, the problem is that investors frequently give back a substantial, or even majority, of their gains when the inevitable corrections come. Furthermore, markets always decline faster than they rise, just as the Dow Jones Industrial Average surrendered 10 years of gains in just the 2-year decline from 2007 to 2009. But having a proper market timing system that works a majority of the time enables one to hold onto their hard-earned gains when market conditions get rough, as they always eventually do.

Since 2002, we have been using a proprietary, rules-based market timing system that has enabled us to produce consistently profitable results with the detailed ETF and stock picks provided in our daily ETF and stock newsletter. In general terms, our market-timing system is designed to:

  • Prompt us to exit our long positions within approximately 2% of all significant market tops (in uptrending markets)
  • Be positioned mostly in cash during choppy or range-bound markets
  • Be positioned mostly in cash or short positions during downtrending markets
  • Get us back into buying stocks and ETFs shortly after the market indicates a significant bottom has formed

To use an actual recent example, take a look at the daily chart of the Nasdaq Composite below:

Market timing for the Nasdaq

As the chart above explains, our model trading portfolio was carrying exposure of 140% going into late March (200% maximum exposure is based on typical 2 to 1 brokerage margin account). On April 4, are market timing model gave us the signal to exit most of our long positions, lowering our exposure to just 38%. One day later, we sold the remainder of our long positions. This put us into a full 100% cash position…perfectly in time to be on the sidelines as the Nasdaq fell another 2.9% just one week later. Although not shown on the chart above, we subsequently began entering new short positions on April 20, just in time to catch the Nasdaq’s big breakdown below key support on April 23 (the following trading day).

Specifically what prompted us to exit our long positions when we did was a combination of a few proprietary signals we share with our subscribers. Because our broad market timing calls, along with our specific trade entries and exits, are documented every day in our newsletter, it is important to realize we are not utilizing any type of hindsight in this article. Furthermore, if so inclined, one could even study our free archive of past newsletter issues over the years to see that similar defensive action was taken at the right time with most other market tops as well. Finally, as a side note, please understand our trading strategy is not designed to call exact tops or bottoms in the market; rather, our goal is always to “take the meat out of the middle,” which enables us to realize the maximum profit with the least amount of risk.

Some subscribers use our service for the detailed stock and ETF picks, while others love the quality, “no-nonsense” trader education. But if you are a trader who already has a list of stocks and ETFs you like to trade, and just need help with overall market timing, you may find our Wagner Daily newsletter to be of great value in your trading operations. Click here for details of how we can help you and to get started today. We guarantee your complete satisfaction.

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