Market Timing For Dummies E-Book

Joe Duarte

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 508

Veröffentlichungsjahr: 2009

Beschreibung

Want to improve your market timing so you can send your investment returns soaring? Market Timing For Dummies takes the guesswork out of developing a trading strategy and provides all of the tools you need to forecast, prepare for, and take advantage of market trends and changes. This authoritative guide is packed with expert advice on how to increase your profits and limit your risk. It helps you grasp the psychology behind market timing as you learn the basics of the method, analyze our finances, select the right software and equipment, and define your market trading style. You'll get the hang of using technical analysis to identify trends and reversals, catch key turning points, and manage risk as you track general market trends, develop a feel for when a particular trend is vulnerable to change, and seize the moment! Discover how to: * Understand how Wall Street really works * Use a wide array of market-timing tools * Anticipate and prepare for trend shifts using technical analysis * Time the stock market with the seasons * Time with a feel for the pulse of the market * Execute successful timing trades * Time the stock, bond, foreign, and commodities markets Yes! You can make money in any market, whether trends are rising, falling, or moving sideways. Let Market Timing For Dummies show you how.

Leseprobe

Market Timing For Dummies®

Table of Contents

Introduction

About This Book

Conventions Used in This Book

Foolish Assumptions

How This Book Is Organized

Part I: Stepping Into the World of Market Timing

Part II: Market Timing’s Methods and Strategies

Part III: Applying Timing to the Markets

Part IV: Timing the Sectors

Part V: The Part of Tens

Icons Used in This Book

Where to Go from Here

Part I: Stepping into the World of Market Timing

Chapter 1: Becoming a Market Timer

Defining Market Timing

Terms of Engagement for Timing

Timing Technique: The Secret of Success

Running Down Reasons to Market Time

The Nuts and Bolts of Market Timing

Financing your possibilities

Analyzing the markets

Setting your timing ritual

Setting Realistic Expectations

You can’t predict the future

You can’t win every time

Measure your success reasonably

Enjoying the Process and the Fruits of Your Labor

Chapter 2: Peering Inside the Mind of a Market Timer

Finding Out How Wall Street Really Works

Introducing the Federal Reserve

Uncovering the Psychology of Timing

Vigilance: Being a steady, not a fast Eddie

Preparation: Acknowledging the Boy Scout in all of us

Execution: Pulling the trigger on the trade

Picking Your Battles and Battlefields

Chapter 3: Preparing Yourself and Your Finances for Timing

Defining the Role of Timing in Your Financial Plan

Financing Your Timing

Considering Personal Matters

Determining Your Net Worth

Getting Tooled Up for Timing

Setting up your trading account

Building your timing toolkit

Chapter 4: Charting Your Course: The Market Timer’s Edge

Defining the Primary Trend

Introducing the Four Amigos: Signals That the Trend Is Changing

Taking stock of the trend reversal

Riding the highs of breakouts

Getting through the lows of breakdowns

Introducing Commonly Used Charts

Candlestick charts

Bar charts and associated tools

Understanding Moving Averages

Trend and Momentum Oscillators

The “Big Mac” of technical analysis: The MACD oscillator

Finding relative strength with RSI

Getting a Grip on Bollinger Bands

Looking into the future

Thinking outside the bands

Making Technical Analysis Work: An Overview

Looking for the setup

Buying on strength and on dips

Using trend lines as buy and sell points

Running down other important technical formations

Part II: Market Timing’s Methods and Strategies

Chapter 5: Timing with the Reports That Move the Markets

Understanding the U.S. and the Global Economies

Homing in on an example

Keeping tabs on the data mill

Getting a Handle on the Reports

Exploring Specific Economic Reports

Using the employment report

Taking in the Consumer Price Index (CPI)

Perusing the Producer Price Index (PPI)

Making sense of the ISM and purchasing managers’ reports

Considering consumer confidence

Poring over the Beige Book

Focusing on housing starts

Taking in the Index of Leading Economic Indicators

Grasping Gross Domestic Product

Trading the Big Reports

Chapter 6: The Seasons and Cycles That Influence the Markets

Getting the Big Seasonal Picture

Glimpsing the Monthly Tendencies

The January effect

The turn of the month

Timing Summers, Holidays, and Santa Claus

Summer folly

Holiday fun

Santa Claus is coming to town

Cycling with the Presidents

Examining the cycles during two presidents’ terms

Using the cycle cautiously

Chapter 7: Digging In to Trends, Momentum, and Results

Trending with the Times

Looking for trends by time

Secularizing the trend

Using the short-term trend properly

Looking at the long-term trend

Spotting trend changes in the intermediate term

Examining Market Breadth

Consulting the NYSE advance-decline line

Analyzing the McClellan Summation Index

Chapter 8: Timing with Feeling: Making Market Sentiment Work for You

Getting in Touch with Your Contrarian Self

Going with Your Gut — and Your Charts

Identifying greed cycles

Identifying fear cycles

Using Bellwether Stocks

Gauging Feeling with Sentiment Surveys

Using Trading Volume As a Sentiment Tool

Finessing “Soft” Sentiment Indicators

Part III: Applying Timing to the Markets

Chapter 9: Timing in the Real World: Examining a Sample Trade

Setting the Stage for a Sample Trade

Sorting through a major mess

Charting your way to the next step

Getting the long-term picture

Viewing the intermediate term

Getting Ready to Trade

Looking for the right opportunity

Tracking the trade

Fine-tuning your exit point as things progress

Reviewing your timing endeavor

Finding a Sequence for Successful Trading

Chapter 10: Timing the Stock Market

Timing the Whole Enchilada

Starting with the S&P 500

Timing and taming the Nasdaq 100

Timing the Dow Jones Industrial Average

Timing Individual Stocks

Bottom fishing

Riding the momentum roller coaster

Shorting the losers

Chapter 11: Timing the Bond Market

What Makes the Bond Market Tick

The give and take between Fed and bond market

Finding general hints about bonds

Tying economic reports to the bond market

Making Bond Timing Work

Reasons to time bonds

Buying bonds for hedging and diversification

Allocating time and money to bond timing

Finding the right time for bonds

Chapter 12: Timing Foreign Markets

The Whole World Is One Market

Considering the Currency Effect

Timing Foreign Markets

Getting started

Dividing up your timing world

Choosing International ETFs

Chapter 13: Timing the Metals, Heavy or Not

Getting the Golden Touch

Treading carefully with gold stocks

Choosing the best route for trading gold

Rounding out the precious sector

The Industrial Truth: Timing Copper and Other Metals

Mining copper trades

Trading steel, ubiquitous steel

Getting into aluminum

Using ETFs to Trade the Metals

Chapter 14: Timing Commodities: Making Money Down on the Farm

Following the Farming Action

Getting a grip on the growing season

Weathering heights

Turning to a commodity price resource

Looking for opportunities in corn and beans

“ETFing” Your Commodities

The PowerShares DB Commodity Index Tracking Fund

The Greenhaven Continuous Commodity Index

The PowerShares DB Agriculture Fund

Market Vectors Agribusiness

The rise of water ETFs

Chapter 15: Timing Currencies and Related Markets

Diving into the Currency Markets

What makes currencies move

The spot market rules the roost

Finding the Nuts and Bolts of Foreign Exchange

Coring Down on Your Charts

Finding the tradable trend

Keeping your perspective

Timing the subtrends

Meeting the Major Currencies

The U.S. dollar

The euro

The UK pound sterling

The Australian dollar

The Japanese yen

The Swiss franc

Part IV: Timing the Sectors

Chapter 16: The Timer’s Dream: Sector Investing

Defining Sector Timing

Analyzing the Markets with a Sector Approach

Defining the Overall Trend

Building — and Watching — Your Sector List

Analyzing Index Components

Getting Fundamental Not Sentimental As You Time Sectors

Chapter 17: Timing Financial Service Stocks

Indexing the Banking Sector

Looking for trades during tough times

When the good times return

Looking for Profit in the Brokerage Sector

Home Sweet Home: The Housing Sector

Finding a home in housing stocks

The mortgage sector

Trusting the Real Estate Investment Trusts

Chapter 18: Timing the Technologies

Applying Timing to Technology

Chips Without Chocolate: The Semiconductor Sector

Tracking down a trend

Investing in semiconductor stocks

Taking a Look at the Hardware Sector

Getting Soft on Software

Intersecting the Internet and Telecommunications Sectors

Chapter 19: Timing the Energy Sector

Factors Influencing the Price of Oil, Natural Gas, Heating Oil, and Gasoline

Supply and demand

The geopolitical equation

The weather issues

Are we running out of oil?

Charting an example

Relating Energy Stocks to the Underlying Commodities

Finding Timing Vehicles for the Energy Sector

Crude oil

Oil and oil service ETFs

Stocking up on oil and oil service

Natural gas

Heating oil

Gasoline

Perusing the Oil Supply Data Report: A Nice Routine for Wednesday Morning

Checking other sources before Wednesday

Reacting to the report

Chapter 20: Timing the Health Care Sector

The Real World of Health Care

Diagnosing the Health Insurers

Introducing the big players

Timing the HMOs

Glimpsing Big Pharma and Biotech

Getting to the technicals

Top-to-bottom analysis

Minding Medical Care Delivery and Hospitals

Making Moves on Medical Equipment

Part V: The Part of Tens

Chapter 21: Ten Game Savers to Know and Trust

Embrace Chaos Theory

Don’t Trade if You Don’t Have Enough Money

Avoid Impatience to Live and Trade Another Day

Never Trade Against the Trend

Trade with Your Plan Instead of Your Emotions

Don’t Be Afraid of the Big Bad . . . Cash

Know When to Say When

Fear the Reaper, Not Adaptation

Set Low Expectations but Avoid Low Self-Esteem

If It Ain’t Fun, Forget It

Chapter 22: Ten-Plus Awesome Resources

Timing Web Sites

FibTimer.com

PMFM.com

DecisionPoint.com

StockCharts.com

Joe-Duarte.com

General Investment Information Web Sites

FederalReserve.gov

StLouisFed.org

WSJ.com

Investors.com

Marketwatch.com

Trading Books

Newsletter Resources

Market Timing For Dummies®

Joe Duarte, MD

Market Timing For Dummies

Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.com

Copyright © 2009 by Wiley Publishing, Inc., Indianapolis, Indiana

Published simultaneously in Canada

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Limit of Liability/Disclaimer of Warranty: The contents of this work are intended to further general scientific research, understanding, and discussion only and are not intended and should not be relied upon as recommending or promoting a specific method, diagnosis, or treatment by physicians for any particular patient. The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation any implied warranties of fitness for a particular purpose. In view of ongoing research, equipment modifications, changes in governmental regulations, and the constant flow of information relating to the use of medicines, equipment, and devices, the reader is urged to review and evaluate the information provided in the package insert or instructions for each medicine, equipment, or device for, among other things, any changes in the instructions or indication of usage and for added warnings and precautions. Readers should consult with a specialist where appropriate. The fact that an organization or Website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Website may provide or recommendations it may make. Further, readers should be aware that Internet Websites listed in this work may have changed or disappeared between when this work was written and when it is read. No warranty may be created or extended by any promotional statements for this work. Neither the publisher nor the author shall be liable for any damages arising herefrom.

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Library of Congress Control Number: 2008939707

ISBN: 978-0-470-38975-1

Manufactured in the United States of America

10 9 8 7 6 5 4 3 2 1

About the Author

Dr. Joe Duarte (www.joe-duarte.com) is best known for his candid, no-nonsense, and prescient expert commentary on the financial and commodity markets, such as his on-the-money call on CNBC, June 4, 2008, when he correctly noted that oil had made a top and that a fall below $110 would take prices to $100 or less. By September 2008, oil had broken below $100. He is a widely read analyst and writer and an active trader. His daily Market IQ column is read by thousands of investors, market timers, and professional traders around the world.

Dr. Duarte is the author of Futures & Options For Dummies, Trading Futures For Dummies, Successful Biotech Investing, and Successful Energy Sector Investing.

His combined expertise in health care, energy, and the effects of politics and global intelligence on the financial markets offers a unique blend of insight and information to thousands of active investors and political and intelligence aficionados around the world on a daily basis.

Dr. Duarte’s Market Moves column is syndicated to a global audience through FinancialWire, a leading independent syndicate of financial information. He is also a featured columnist on the popular investor Web site Stockhouse.com.

Dr. Duarte is a frequent guest on CNBC and is an original CNBC Market Maven. He is a regular guest on the Financial Sense Newshour with Jim Puplava radio show, where he comments on the energy markets and geopolitics.

Dr. Duarte has been writing about the financial markets since 1990. His articles and commentary have been featured on Marketwatch.com and in Barron’s, Smart Money, Medical Economics, and Technical Analysis of Stocks and Commodities magazines. He has been quoted in the Associated Press, CNN.com, The Wall Street Journal, Smart Money Magazine, and Investor’s Business Daily.

In 2003, Dr. Duarte received second place in the professional section of the Medical Economics Investment Challenge with a 12-month return of 42 percent.

Dr. Duarte published the critically acclaimed market-timing newsletter “The Wall Street Detective” from 1990–1998, when it became an exclusively electronic publication. It later was converted to Joe-Duarte.com. His daily market commentary “Joe Knows” appeared on Financialweb.com from 1998–2000. Dr. Duarte served as senior columnist for Investorlinks.com from 1998-2001. He is a registered investment advisor and president of River Willow Capital Management.

He lives in Dallas, Texas, plays a Gibson ES-135, and loves his vintage Völkl tennis racket.

Dedication

To family, friends, and market timers around the universe.

Author’s Acknowledgments

Writing a book is a unique, lonely, and personal experience, and very few but the author, the editor(s), and those who share the space-time continuum with them can understand this. During this one, I had my share of ups and downs as well as rewards. So I can’t complain. Still, I couldn’t have done it without the usual gang that helps me on a daily basis. So here’s a big thanks to:

My family, my office staffs from my other life, the Wiley editorial staff, especially Stacy and Traci who helped shepherd me to the final goal, nearly on time for once.

Grace “the wonder agent” and purveyor of recurrent gigs. Thank you for sticking with me.

Frank “the master of all things Web-related,” without whom there would be no Joe-Duarte.com. Too bad you couldn’t come along on this little expedition.

To Stone Barrington, Michelle Maxwell, and Sean King, Gabriel Allon, Oliver Stone (the literary character, not the movie director), and other inhabitants of pages and audio books that help me stay sane as I work and travel.

As always coffee, tea, vitamins, sports drinks, nutrition bars, and the game of tennis also help.

Special thanks to those who read my books, subscribe to my Web site and have kept this thing going for 18 years. Who’d’ve thunk it?

And also to two longtime friends, John and Greg, whose interactions with me always prove to be worthwhile and interesting, to say the least.

My patients who so graciously come back the next day even if I’ve had to run out of the office in a hurry to be on CNBC.

If I’ve forgotten to mention anyone, it wasn’t intentional. I’m not as young as I used to be.

Publisher’s Acknowledgments

We’re proud of this book; please send us your comments through our online registration form located at http://dummies.custhelp.com. For other comments, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax [phone].

Some of the people who helped bring this book to market include the following:

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Project Editor: Traci Cumbay

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Editorial Assistants: Jennette ElNaggar, David Lutton, Joe Niesen

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Introduction

When I started trading, I had no idea that I was a market timer. The whole concept that you could actually maximize your gains and avoid major losses by managing your portfolio was foreign to me, given the fact that Wall Street’s buy-and-hold mantra is the first thing that anyone ever hears about. But after nearly 20 years in the business, every time there’s a bear market or a market crash, I’m glad that I took it upon myself to learn the craft.

Martin Zweig, a legendary money manager from the 1980s, changed the way I looked at investing when he promoted his book Winning on Wall Street (Grand Central Publishing) in the early days of financial television. The phrases “don’t fight the Fed” and “don’t fight market momentum” were so intriguing that I bought the book and became a market timer.

With this book, I hope to humbly contribute to opening more readers’ eyes to a new reality — that of being able to avoid catastrophic losses and to maximize stock market gains by actively managing their portfolios.

About This Book

Market timing is the most essential aspect of all trading and investing endeavors. If you think about it, timing is the key to success in many things you do. Try to hit a tennis ball without timing your stroke. Or try to run a yellow light before that camera goes off behind you without timing.