Seattle Technical Advisors
Why Technical Analysis?

 

"Everyone times the market.  Some people buy when they have money and sell when they need money.  Others use methods that are more sophisticated".  - Marian McClellan, co-founder of the McClellan Oscillator
 

One-Month Free Look!

 

Contact us for a one-month free-look at the website.  We'll send you a password and you'll have 30 days to decide whether or not to subscribe.
Don't be blind
Free Look!
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Buy and Mold
Park and Pray
Still using that same tired investment approach?

Why Technical Analysis?

The history of the stock market is characterized by alternating, secular bull and bear markets.  While holding for the long-term might work well for those with an unlimited life expectancy ("in the long-run we're all dead"), these recurring secular bear markets (lasting, on average, 18-20 years) can turn passive investment strategies into financial suicide and financial careers into fond memories.  It is possible to build wealth during secular bear markets, but investors and advisors must first discard the buy-and-hold asset allocation strategies that worked so well during the previous bull market and adopt the dynamic approach known as technical analysis.


Why Now?

There is no reason to think that this secular bear market is close to its conclusion.  History has shown that in order to correct the structural distortions built up in the previous secular bull market it is normal for the economy to suffer between four and six recessions before a true change in secular trend is seen.  We have, so far, witnessed only our second recession since the 2000 top.  Valuations are still far above undervalued levels normally seen at the bottom of a secular bear market.  Take a moment to look at the Shiller P/E series.  Clearly there is a long way to go to reach bear market lows.
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“The investing environment has changed and those who don’t acknowledge that fact are on the wrong side,” says Rick Bensignor, chief market strategist at Merlin Securities.

Mr Bensignor says equity investing has altered, from a strategic “buy and hold” approach to a tactical, more short term one: “It really is a trader’s game.” - Financial Times 12/14/11

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But What if I Miss the Best Days in the Market Each Year due to Market Timing?


January 1, 1990 - February 10, 2010

All days, $100 invested at the open of 1990 becomes $304.33 (buy & hold)


Miss the best 200 days and $100 becomes 87 cents


Miss the worst 200 days and $100 becomes $134,251.48


Miss both the best and worst days and $100 becomes $385.53 (better than buy & hold!)

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