Market Overview & IPM Turn Window

Yesterday DJIA, Nasdaq 100 made new highs, while SP500 reached within 1 point of its all-time highs. All of this happened during the IPM top window. This again suggests that the Inflection Point Model is working and adding longs was the right strategy on the decline.

Following comment was posted on the blog on July 12:

"I question the i'm turn window or turn date...whatever u call it. Since u went long we've gone down or at best sideways. Seems like turn date should have been about 2 weeks later...If in fact we go up next week.

If ur method is proven u wouldn't be dollar cost averaging when it's going down...or else u just got in too early. 

I can say today is the turn and then when it goes down just say I'm adding more because someday it will go up again.

Regardless I hope ur right and it does go up but your method doesn't seem to work this time...or else the dates weren't right."

Now if we go back on July 10th and see where indices were, we get an interesting picture:

Index	July 10 – Low	July 16 – IPM Top Window	% Gain in 5 days	Annual Gain
DJIA	16805	17138	2%	99%
SP500	1953	1984	2%	79%
Nasdaq 100	3837	3947	3%	143%
GDOW	2585	2633	2%	93%
Russell 2000	1151	1160	1%	39%

The table above shows that the market did rally sharply into the IPM turn window. However, adding longs would not be possible at the lows if one did not have IPM turn window information. In this rtegard, following comment was also posted on the blog:

"Turn dates are what they are. I don't choose them, the model does. Only with the knowledge of next IPM turn window being a top, one can go long. If next turn window would have been a bottom, would have not gone long instead would have shorted.

So without the turn date and nature of the turn information, you can only guess. And guessing is not investing, it is playing in the casino. Current turn is similar to April 2013. Upcoming days will be telling."

even with this rally, I will be the first to admit that the market action has been poor. Under-performance of small caps raises many issues, especially as we enter the IPM top window. Initially, the expectation was that we will see a sharp relentless rally. However, it now feels like a subdued rise from an internal strength perspective. Therefore, one should wait for the IPM bottom window to gauge long trade on trigger.