93% Chance Of Double Digit Returns This Year?

February 22, 2012
	The briefing was updated Monday and can be found in The Briefing Room.   Our objective is to keep your portfolio from ever looking like the man above. This week will be a change up.  Instead of talking about what is happening in the world's economy, I'm going to touch base on technical analysis.  I've been following an interesting newsletter from a gentleman named Wayne Whaley.  He has been studying seasons and their ability to predict the market.  I don't mean to say he is studying whether winter can tell you if the market is going to go up or down, since winter can't talk.  What I mean to say, for example, is if during the three weeks surrounding the Christmas and New Year season the market goes up, what are the chances the market will go up next year too? Technical analysis assumes that people continually do the same things again and again.  Lets say a person walks into Kwik Trip every morning at 6:30 and buys a cup of coffee and a donut.  If he he comes in on Monday and does the same, what are the chances he will be in  Tuesday as well?  If he DOESN'T come in on Monday, how does that affect his chances of being there on Tuesday?  If he were an investment and there were an 80% chance he would be there on Tuesday based on his Monday appearance, we might invest in him.  If there was only a 20% chance he would show up because he wasn't there on Monday, we would probably skip the opportunity. Wayne has studied the market seasons going back to 1950.  He has determined that 28 times over the Christmas and New Year Holidays since 1950, the market has increased over 2%.  26 of the 28 times this occurred, the market the rest of the year averaged a 14.54% return.  Since this last Holiday season was over 2%, this says the rest of the year has a 93% chance of giving us double digit returns.  This would seem to agree with Don's analysis in the briefing room last week that the long term cycle appears to have turned up. Auto pilot in jumbo jets help the pilot, but are not a substitute for the pilot.  This is how we look at market predictors like Wayne's.  Its a tool and provides confirmation to our thoughts, but is no substitute to watching the market every day and making decisions regularly based off high probability risk vs reward.  We want that double digit return, but we don't want the potential 20% drop that might occur between here and there.  Smooth rides are always the most comfortable ones! We sold our MA positions when the market hit $13,000 on Tuesday.  Since then it has pulled back about 1% without us in it.  Read this week's briefing and see what we are watching for in order to take new positions again. Have a great day!! John Norquay CEO PivotPoint Advisors		In order to view the graphs and charts in our newsletter, please click the link at the top of your email to "always show images from PivotPoint Advisors" Resources Check out our Youtube Channel  Like our FaceBook FAN Page We manage money inside 401k plans. Know anyone who may want to use us? Click "Forward to a friend" (immediately below) to share this newsletter with friends you think may appreciate our services. Forward to a Friend Twitter Subscribe to the Weekly Briefing Report Unsubscribe Update Subscription Preferences  View Email In Browser