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Can the markets be timed?

Jack Chan
March 21, 2005

Conventional wisdom suggests market timing can not be done, and their argument is quite convincing, because the market either goes up, or down, therefore, a flip of a coin has a 50/50 chance. Someone important once said, " In all of my years in the business, I have yet to meet a rich technician." Well, that is not true. The two most successful investors in modern times are market timers, although they do not like to be labeled as such.

Market timing using fundamental analysis
The two most successful investors in the modern era have my upmost respect, Mr Warren Buffett and Sir John Templeton. Neither of them are known as market timers, but they are. No, they are not day traders of course, they are not even traders. They are value investors. Mr Buffett's famous quote,

"buy when everyone is afraid and sell when everyone is brave."

Sir Templeton has recently been quoted,

"I do think it's interesting that in all my 92 years, I've never seen a time when it was so hard to find a bargain."

The fact that these two legendary investors believe only in buying low and selling high, makes them market timers whether they like the label or not. They base their timing on fundamental analysis.

Market timing using technical analysis
If a great deal of profits can be made by buying low and selling high, can technical analysis be an aid to identify what is low and what is high? The answer is yes.

Our model
There are many different approaches, techniques, and methods in technical analysis. For the untrained eyes, TA could be quite intimidating, because the majority of technical analysis are indeed very complicated with many variables. Yes, a coin toss may be simpler and more effective. However, it doesn't have to be complicated. The most popular comment from our subscribers is how simple and effective our model is, see for yourself...

This is our proprietary (fancy word for homemade) gold model.

When both price line and moving average are up, the cycle is up.
When both price line and moving average are down, cycle is down.
When the cycle turns up, investors rotate their funds into a gold ETF or mutual fund.
When the cycle turns down, we take profits.

Current cycle turned up on Feb 22.

This is our energy model.

Current cycle turned down on March 10.

Yes, the markets can be timed. Not on a day-to-day basis. Our goal is to build wealth over time, and there are times when we should be in the market, and there are times when we should be out. Once we are positioned in the market according to the model, we go fishing. And once we are out of the market, we do more fishing.


Jack Chan

321gold Inc