Thursday, August 18, 2016

Inflection Point Model - August Turn Date

Market's decline over the past few days probably culminated at today's Fed meetings minutes. Although there was nothing significant in the minutes, underlying uptrend of the stock market is taking the lead. 

There are several ways, technical and non-technical, in which one can justify either direction of the market i.e. up or down. But in any case, according to our proprietary market timing model, the next turn window is scheduled for Aug 30, 2016 (+/- 4 days).

Although the turn date signifies a major market inflection point with the direction, different market indicators suggest that current rally will continue till the end of August. End of August turn window will most likely be a short-term market top. 

This also means that next week's Federal Reserves Jackson Hole meeting would also propel the stock market. We will will discuss other indicators in the next posts. But the key thing to keep in mind is that no matter what anybody says about the market, the path of least resistance is always with the trend.

Currently, according to proprietary Market Classification Model, the stock market is in an uptrend. This model took us out of the stock market in September 2015 and kept us out of the stocks till June 2016. As a result, we avoided the sharp market gyrations, while investing in better performing areas. 

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