 101 Investment Timing Tools
We have collected 101 of
the most popular and powerful market timing techniques
and investing strategies you can use for investment timing
and trading
in the stock market. You might want to bookmark this resource
page because there is a lot of information and resources to explore.
We have organized these investment timing
strategies by groups for easier reading, and at the bottom of the list
we discuss some of the more credible timing strategies.
Unemployment rate
- tracking
the number of new jobs created or lost is a decent indicator of the
trend in economic activity. Rising new jobs created is a
bullish
trend, whereas rising unemployment is a bearish trend. More
on unemployment
rate investment timing.
Consumer price index
- rising CPI can be a signal of strong economy in the short term, but
over the long term can lead to higher interest rates and a dampening
effect on the stock market. Forex currency traders also watch CPI
signals to time many of their investment trades. Here you can
track
CPI trends.
Yield curve
- the spread between the interest rates on the ten-year treasury note
and the three-month treasury bill—is a valuable forecasting tool. It is
simple to use and significantly outperforms other financial and
macroeconomic indicators in predicting recessions two to six quarters
ahead. More on timing
your investments with yield curve analysis.
Housing starts
- are an economic confidence indicator closely correlated with the
economic cycle. When housing starts are rising more people
feel
confident they can afford the long term cost of a home and this boosts
overall economic activity levels which is generally positive for the
stock market outlook. More on using
housing starts to time your stock market investments.
Consumer confidence
- rising levels of consumer confidence mean a happy consumer
who
is more willing to spend money and is generally a positive signal for
the stock market. More on investing
using consumer confidence.
Purchasing Managers Index
- is a sentiment indicator based on surveys of 4,000 purchasing
managers. A reading above 50 generally means their business
segment is expanding and is a bullish signal. More on using
the PMI to time stock market investments.
Gross Domestic Product
(GDP) -
an aggregate measure of total production in an economy, it is the
bellwether economic indicator tracked by many investment
professionals. Positive GDP growth in the 3 - 4% range is
generally considering bullish, while 2 quarters in a row of negative
GDP growth is considered an economic recession. More on timing your
investments with GDP analysis.
Business cycle
- watching economic signals to determine what stage of the business
cycle the economy is facing can give you an edge in positioning your
investments into sectors that will perform best in that stage of the
market cycle. More on timing
your investments with the business cycle.
Beige book
- a report released by the Federal Reserve 8 times per year that is
primarily used to make decisions on interest rate changes, the tone and
language of the report often reveals bullish or bearish clues that will
make the markets react. More on using
the beige book to time investments.
Sell in may and go away
- this annual cycle theory postulates that the best returns in the
stock market are from November to May of each year. This
theory
has been debated for years but recent studies show with data going back
to the 1950's show that investors practicing this simple seasonal
market timing strategy can outperform the index. Read more on
sell
in may and go away market timing.
Santa Clause rally
- the 17 days from Dec 21st to January 7th of each year is thought to
bring a surge in stock prices due to the general good feelings of
people, spending and investing Christmas bonuses, with stock markets
having light volume that magnify market movements. More on Santa
Claus rally timing.
The January effect
- is a seasonal pattern observed in the stock market where the month of
January often has a significant rally. It is theorized that the cause
of the January effect is investors that have sold losing trades for tax
losses at the end of the year are busy reinvesting their capital.
Read more on the seasonal
market timing with the January effect.
Presidential cycle
- predicts stock markets will be down or flat for the first two years
of a president's term, and will rally during the last two years which
is thought to be linked to the Federal Reserve lowering rates to
improve the chances of the President getting re-elected. More
on presidential
stock market investing.
Turn of the month
- this cycle predicts that the if you invest on the last day of every
month and sell on the 5th day of the next month you will have better
returns that buying and holding all year. Data seems to
suggest
this may give you a slight edge with the theory being most pension
funds invest their new money each month during this time frame.
Read more on the turn
of the month investment timing model.
Elliot wave
- uses fibonacci numbers and analysis to predict major turning points
in the stock market. More on elliot wave stock market
analysis.
The trend is your friend
- determine the overall trend of an index or sector and go with it
until the trend is broken. More on trend
trading strategies.
Breakouts
- time your entry into a stock or index once it has broken out of a
predefined trading range, often successful in catching the beginning
stages of the securities next big rally. More about timing
your breakout trading.
Breakdowns -
time your exit from a stock or entry into shorting it by identifying
breakdowns. More about timing
breakdowns.
Momentum -
stocks in motion tend to stay in motion until the trend breaks, so why
not ride the highest momentum trades to maximize gains? Here
is a scan
tool to help identify momentum trades.
Moving averages
- calculate the average price of a stock over a period of time and
graphically see the trend direction. More on trend
trading with moving averages.
Moving average crossovers
- one of the most popular long-term trend signals is the 20 week and 50
week moving average crossover. When these moving averages
cross
it is a technical long-term trend change signal. More on market
timing with moving averages.
Support levels
- are key areas on a price chart that provide strong buying support to
prevent prices from going any lower. Buying a pullback down to a key
support level can be a low-risk entry point. Learn more about
timing
your trades with support levels.
Resistance levels
- are key areas or zones on a stock chart that experience selling
pressure every time price action reaches those levels.
Selling at resistance levels can help maximize gains, or if
prices finally break through these levels it can turn into a good entry
point and future level of support. More on trading
resistance levels.
Trading volume
- when stocks rise on increased trading volume it is generally
considered a bullish signal and this is considered an accumulation
phase. Bearish signals are when stocks are in a distribution
phase that have rising volume when prices are falling. Volume
changes can predict price changes so watch for changing trends in
volume relative to price movement. More on timing
your investments on trading volume.
Relative Strength
Comparative - possibly one of the most powerful market
timing tools to actually discover what stocks or sectors are actually
outperforming an index. This technical tool compares individual returns
to the movement of an index to help you find out what's truly
outperforming. More on timing
investments with comparative relative strength.
Gap trades -
look for gap up openings and an indicator to indentify potential
trades. Read more on gap
trading strategies.
Portfolio upgrading
- a portfolio management process that continuously upgrades portfolio
holdings into top performing stocks or sectors while at the same time
reducing exposure to prior leadership that is starting to
underperform. Here is a good tool to help with
your portfolio upgrading process.
CAN SLIM -
is a growth stock timing strategy analyzing a mix of fundamental and
technical criteria. More on CAN
SLIM market timing.
Japanese candlesticks
- used by rice traders in the 17th century this ancient charting form
is still powerful. How to read
candlestick patterns to time your trades.
Volatility Index (VIX)
- this market volatility indicator can be helpful to time very short
term trading periods. More on market
timing with the VIX.
McClellan Summation Index
- a popular market breadth indicator derived from the summation of
advancing and declining stocks in a market, making it easier to spot
market turning points. More on timing
your trades with the McClellan Index.
NYSE Bullish Percentage
(BPI) - is an indicator that tracks the ratio of
stocks on the NYSE that are in a bullish trend, with the BPI
charted in a time series graph to see the change in trends.
More on timing
your investments with the Bullish Percentage indicator.
Greed cycles
- when a sector or the market continues to go up no matter what, with
news reports and the public talking about this historic investment
opportunity, its probably getting close to a time to sell.
This
is a classic bubble formation driven by greed that will eventually pop
and will be your time to take a contrarian position. More on greed cycles.
Fear cycles
- identifying a fear cycle can often be a good entry point into a stock
or sector, and are often characterized with plummeting stock prices,
"doom and gloom" news reports, and politicians getting involved in
trying to fix something in the market. More tools to
indentify fear cycles.
Dow theory
- original stock market timing theory put forth by Charles Dow over 100
years ago still outperforms buy and hold by about 2% annually over
longer time frames. Read more on market timing
using the dow theory.
Dogs of the dow
- popular timing strategy where you invest in the 10 highest yielding
dow stocks each year with the assumption they are at their bottom of
their business cycle and will see growth in their share price ahead.
More on dogs
of the dow market timing strategy.
PEG ratio -
use the PE to EPS growth ratio to time the entry into high growth
stocks selling on the cheap. More on PEG
ratio investment timing.
Insider trading
- time your trades with people on the inside who know the most about a
company. When they put their own hard earned money into
buying
their own stocks it is a big bullish signal. More on finding
and timing market trades with insider signals.
Institutional ownership
- time your trades into with institutional investors into individual
stocks that are just being discovered by institutional investors.
Other institutional investors often follow leading to an
increased
demand and price for the stock. More on institutional
investors market timing abilities.
Fundamental analysis
stock screener - use this detailed screener to sift stocks
by important fundamental criteria. Use fundamental
analysis screening to time your trades.
Warren Buffet stock scan
- screens for companies that have a monopoly position and strong
pricing power, to ensure consistent profits, but where there is
significant unrecognized value. See the latest Warren
Buffet scan picks.
Day trading
- daytraders time the market all day long watching intraday charts.
More on how to time
your day trading setups.
Swing trading
- learn how to time entry and exits when swing trading for short term
profits. More on timing
a swing trade.
Multiple timeframes
- often utilizing multiple time frame analysis will give you a better
analysis. Details on market
timing multiple time frames.
Big growth on the cheap
- scan that identifies large capitalization growth stocks trading at
low valuations. See the latest
big growth for cheap scan.
Technical analysis scans
- literally hundreds of different stock scans based on technical
analysis. Start timing
your market trades with these scans.
Industry sectors
- scan
for the best and worst industry sector performance to
identify your next stock market investment.
Analyst coverage
- screen
for analyst upgrades to help identify new trades.
ETF screener
- find exchange traded funds with this market
timing ETF screener from Morningstar.
Mutual fund screener
- time
your mutual fund investments with this screener.
Dividend yield
- sort through the market with this screener to time
your entry into the highest dividend yielding stocks.
New 52 week high
- stocks making new highs tend to continue the trend until it reverses.
Find new
52 week high stocks.
Sector Group Leaders
- easy visual analysis easily identifies sector leaders with Finvis's group sector
screener.
High momentum stocks
- find stocks moving up with high momentum with this momentum
timing screen.
50/200 moving average
crossover - find new long term trends in the market using
this 50/200
moving average crossover scan tool.
Double bottom formation
- a classic technical pattern indicating a trend reversal has occurred.
More on timing
good entry points with double bottom formations.
Hemlines - this theory
predicts that as hemline styles go shorter and shorter it is a sign of
consumer confidence and good times ahead for the stock market. The
rational put forward is that since a short skirt cannot be altered to
reflect changing styles and seasons, women feel more confident about
their economic outlook and are willing to spend money on specialized
clothing. Monitor fashion trends to start
trading hemline signals.
Hot waitress index
- if you see more hot waitresses chances are the market and economy is
slowing down. In good times there are plenty of opportunities
in
marketing, real estate, and modeling for attractive women, but as times
get tough these opportunities dry up and force people into alternative
lower paying jobs that good looks can still give you an edge, like
waitressing. Sign me up... its a lot easier on the eyes keeping the pulse
on this index at smoking hot waitresses that trading screens for timing
my investments.
Moviegoers index
- when times are tough and financially depressing people simply want to
escape into the dark comfort of a movie theatre. To gauge
what
part of an economic cycle we are in you can watch movie ticket sales
numbers to time your investments.
Wine values
- dollar value of Napa Valley wine auction has been
show to have an 84% correlation to predicting the future
direction
of the DJIA for that year. For wine lovers timing
the market with
wine sales auction index might just be your inside edge!
The BMW gauge
– watch auto luxury sales. It’s a positive economic signal
when BMW dealers notice car shoppers looking for a 3 series car but end
up upgrading and purchasing a more luxurious 5 series sedan.
Track monthly car
sales data to help your trading positions.
Financial Astrology
– look to the stars and heavens for signals that forecast future
movements in the stock market. If astrology is your game you
might want to read more on astrological
market timing.
VectorVest -
$695 per year can get you access to this popular trend trading software
package. More on Vectorvest
market timing software.
iQChart -
$959 per year for this stock charting software. Learn more about timing the stock market with
iQCharts.
WinTick -
$999 per year for this internet based stock trading platform.
Details on WinTick
stock market investing software.
Metastock -
$2,400 per year for software and data package. Get more info
on this top
of the line trend trading and market timing software.
Tradestation
- $2,900 per year for software, data is an additional cost.
Read more about the number one rated rules
based market trading platform.
NinjaTrader -
$995 software purchase for advanced trading platform. More on
market
trading with NinjaTrader.
TeleChart -
$999 per year for charting and scanning software. Read more
on Worden Telechart
Stock Trading Software.
All
About Market Timing by Les Masonsons.
Market
Timing for Dummies by Joe Durantes.
Trading
Full Circle: The Complete Underground Trader System For Timing and
Profiting in All Financial Markets by Jea Yu.
Trend
Trading for a Living: Learn the Skills and Gain the Confidence to Trade
for a Living by Thomas K. Carr.
Unlocking
Wealth: Secret to Market Timing by John Crane.
Yes,
You Can Time the Market! by Ben Stein.
Timing
is Everything: A Comparison and Evaluation of Market Timing Strategies
by Chris Brooks and Caliburn Capital Partners LLP.
Market
Timing of International Stock Markets using the Yield Spread
by Bruce G. Resnick, Wake Forest University.
Market
Timing & Trading Strategies Using Asset Rotation by
Panagiotis Schizas, University of Peloponnese.
Towards
a New Theory on Market Timing by Vijaya B. Marisetty,
Monash University.
Optimal
Market Timing by Xuenan Li, Stephen M. Ross School
of Business at University of Michigan.
Market
Timing Using Exchange Traded Funds by Lewis A. Glenn.
Market-Timing
Strategies That Worked by Pu Shen, Federal Reserve
Bank of Kansas City - Economic Research Department.
Market
Timing Can Work in the Real World by Glen A . Larsen , Jr .,
and Gregory D . Wozniak, The Journal of Portfolio Management.
Sector Carpets
- use graphical sector carpet charts to visually see what sectors are
outperforming during different timeframes. A great tool is Stockcharts
sector carpet timing tool.
Tactical asset allocation
(TAA) - use long term TAA strategies to overweight top
performing asset classes and outperform buy and hold returns.
More on tactical
asset allocation strategies.
ETF Heatmap
- visually see what sector ETFs are gaining as well as dropping with
the easy to
read ETF heatmap at Finviz.
Gold - the
gold miners bullish percent index is one of the best charts you can use
for market
timing gold investments.
Copper
- to trade copper successfully keep tabs on the housing index as house
construction drives the most demand for copper. More on timing
copper investments.
Commodity fundamentals
- examine the weekly government report from the US commodity futures
trading commission outlining long and short positions held in each
commodity. Use the commitments of traders report for timing
commodity trades based on fundamentals.
Commitment of Traders
report - adjusting asset allocations in commodities can
help outperform the market. More on using the COT
report to time asset allocations.
Weather reports
- key agricultural commodities are susceptible to bad weather and can
rally significantly on bad weather reports that could limit crop
supplies. Read more on market
timing commodities with weather reports.
Baltic Dry Index
- use this leading indicator of the cost to ship raw goods by container
ship across oceans as a leading indicator of industrial demand for
commodities and general economic activity. More on investment
timing with the Baltic Dry Index.
Oil - read
the weekly Oil
Supply Data Report to see if there is an increase or decrease
in supply and demand domestically.
Steel
- demand for steel is closely correlated to industrial
production so timing your investment in steel should be focused on
watching for signs and changes in global economic activity.
More
on timing
and trading steel ETFs.
Beating the Dow with Bonds
- a lower risk timing strategy over equities using a simple
bond market timing strategy.
Pimco bond timing
- Pimco is the leading bond fund market and their leading fund manager
uses a simple chart to time bond investments. More on the Bill
Gross bond timing model.
Long term interest rates
- use of long term interest rates in a timing model reveals impressive
results and has outperformed buy and hold by a margin of more than 3%
annually. Read more on market
timing using long term interest rates.
Short term bonds
- if your focusing more on the short term you may be interested in this
short
term bond timing strategy.
Study on bond trading
- Short-term
market timing using the bond-equity yield ratio financial
journal article.
Bond screener -
if your looking for a specific type of bond or yield use this bond filter tool
to time your investing.
Currencies
- trading currency ETFs are a simpler strategy for gaining the hedging
and speculating advantages of currency investing. More on currency
ETF investing.
So What's the Best Strategy?
We think a synergistic
combination of strategies will give you the best market
timing results over the long-term. We have sorted and sifted
through these various strategies and developed a mechanical investment
timing strategy that works with any industry or sector and is focused
with long term results in mind. Following a timing strategy
takes perseverance, patience and courage to ride out the inevitable
tough times that will come your way, but overtime it works and can help
you exceed market returns.
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