A New Strategy For Outperforming The Markets

This week confirmed once again everything we have written over the past year: forget valuations and other metrics. Determine the planned ‘agenda’.

Yes, markets are manipulated, and now more so than ever. That means that our methods of technical analysis at Dohmen Capital Research, which measure factors like money flows, are more important than ever. For example, the chart formations give us a great picture of the trend of buying versus selling pressure.

Our chart below shows two “rising wedges”. These are important negative formations, but you have to wait for the downside breakout. See how that triggered our sell signal on February 23rd last year, which perfectly timed the crash that started the next day.

Now we have another rising wedge and a downside breakout. It doesn’t guarantee another crash, but it tells us it is time for action.  

The day after we issued the signal in our trading services to “raise cash,” the markets opened on big down-gaps and plunged, with the Dow down about 735 points intraday. It was another bullseye for us and our valued subscribers.

In our Wellington Letter, which will be released at the end of January, we will give our complete analysis of what lies ahead.

It is always important for investors to have a plan. Don’t act on emotions or what you hear in the media. They always tell you to “hold for the long-term.” That’s about the worst advice you can get.

They will tell you “no one can time the markets.” We have shown over 45 years that it is possible to time the market, by calling all significant declines over that time. Look again at our calls over the past year.

If a bear market is ahead, does it make more sense to stay invested all the way through the valley? Or is it better to sell high and then have cash to eventually invest near the low when the masses finally capitulate?

The answer seems obvious, but most investors don’t follow the right course.

1 2 3 4
View single page >> |

It has worked for us and our valued subscribers at Dohmen Capital Research for 45 years, helping us avoid all the major market declines, both short- and ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.
William K. 4 weeks ago Member's comment

To do well at active trading one must make correct choices in a timely manner, That, in turn requires skill, knowledge, and insight, which certainly are not evenly distributed among society. So for many folks the buy and hold is quite reasonable.