Market timing. Catching stock market reversals in real time.
I suggest to test the possibility of market timing. I’ve written about using this approach in this article.
It’s one of my investing strategies as I indicated in this article.
Now a little more detailed.
I use three models to evaluate the current state of the stock market: long-term, mid-term, and short-term. As mentioned, my long-term model has been indicating a bearish signal since September 2021, which is why I didn’t fully load my portfolio during the recent bull run. However, the signals from the other two models have fluctuated multiple times during this period.
What do we have now?
Mid-term model is indicating that we are topping. This suggests that although we may experience some growth for a period, it is unlikely to be significant. Furthermore, it is almost certain that we will eventually return to our current levels. Accordingly, I have almost completely hedged my portfolio with put options on SPY.
Yesterday, we also received a red flag from our short-term model.
So today, all three models are indicating a downtrend. I have full confidence in these signals, and as a result, I’m out of the stock market now (my total portfolio has a negative delta through short S&P futures and long SPY put options). Wishing everyone the best of luck. Please note, this is not an investment recommendation. I am not a profi but just individual investor.
