Q: What's the Key Benefit to Using The Market Forecast?
A: The Market Forecast predicts the stock market. It tells which direction the market trend is moving-up or down. It shows us when changes in the trend are about to take place, allowing us to take profits and change strategies. It identifies pullbacks, which an we can use to re-enter a trend. It alerts us to these things before they happen.
The Market Forecast is unlike any tool you have ever used.
Q: How do I get started?
A: There is a wealth of resources here at The Market Forecast for you. All of them were developed to help you start quickly. Download our e-book "No More Guesswork" and review it. It provides a simple 3-step approach to learning about the Forecast Graph, why we use ETFs to invest, and how to use them to trade profitably. The book also lays out a plan for you to successfully launch into your first 30 days with us.
Watch the Fast Start Videos we produced to help you with a variety of common questions investors ask. To watch the videos, select "How It Works" from the main menu bar appearing at the top of every page, then choose "Video Training" from the tabs.
Read "Today's Market Forecast" each day for Steve's insights and analysis. He details investing conditions, describes trading strategies, along with entries and exits, and explains where and how to set stop losses.
Then take everything you learn and practice it until you are confident that you understand and are using the methods correctly. The "practice" is known as paper trading. Paper trade what you learn here and you should have much better results with your investing.
Q: You talk a lot about ETF's, what are they, and how do they work?
A: ETF is an acronym for Exchange Traded Fund, which is an investment vehicle traded on an exchange, like stock. An ETF holds a "basket" of assets, such as stocks or bonds, and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. Your shares of an ETF comprise your portion of that basket.
Many ETFs track an index, such as the NASDAQ or S&P 500.
We favor ETFs for several reasons, all of which are described in our downloadable e-book "No More Guesswork". For this discussion, suffice it to say that ETFs give investors the advantages of diversification without the negatives of standard mutual funds: high fees, sub-par performance, and restrictions on buying and selling shares.
ETFs trade freely, are easily bought and sold during the day using a variety of order types, are option-able, can be bought on margin or sold short, and give you compete control over when and how you're in the market.
But most important, we use ETFs to keep it simple.
Many investors waste a lot of time trying to evaluate sectors, industries and companies looking for good stocks to buy, but they never invest successfully. It's called "paralysis by analysis". Unfortunately, a recent study found that 75% of stocks have failed to keep up with the market since 1980. In other words, there's only a 1 in 4 shot that stock you buy will even match the broad market's performance over time, much less turn into a real "home run". Those aren't good odds.
We eliminate the need to worry about stock analysis by focusing on indexes and investing in the ETFs that track them.
Q: I don't want to day trade, so what cycle should I play if I only want to trade just a few times a year.
A: The great thing about The Market Forecast, is that you CAN choose the timeframe that best suits your trading style and needs. In this case, consider following the LONG TERM or INTERMEDIATE trend cycles. The intermediate cycle really is one of the most profitable cycles we follow historically, and its has a cycle period of about 12 weeks (on average). That means about 4-6 weeks moving up, and four to six weeks moving down. That timeframe works well for anyone managing their 401K or retirement account as well. In a the down trending phase, you can move to cash, or outside of your 401k, move you money into an inverse ETF such as the DXD or QID double beta funds.
Q:When some lines are going up while others are coming down, which one do I follow?
A: We always recommend that you FOLLOW the line the best suits your trading style, AND use a line longer than it for your trading bias. For example if you were a very short term trader using the (cyan) momentum cycle to trade, you would want to keep your eye on the the intermediate cycle and play in the direction of its trend. In this case, wait for the momentum cycle to be moving up, in the same direction as the intermediate trend. In the following chart, you can see a rising intermediate trend and counter-move pull-backs on the momentum cycle. When the momentum decline has completed its decline into the lower reversal zone, it is usually very good entry point for a long position following the trend of the rising intermediate line.
For a declining market, we would play it in reverse, wait for the momentum cycle to top out in the upper reversal zone, and play short positions down using the the declining intermediate trend as our bias.
Q: Where did The Market Forecast originate?
A: The Market Forecast was invented by Stephen Swanson, and grew out of the pioneering research he developed for analyzing voice and speech patterns for the hearing impaired more than 25 years ago.
Futures traders, who discovered his work, approached Steve and asked him to adapt his speech analysis technology to help identify subtle, repeating patterns in market movements. They had identified the cyclical nature of markets, but were having difficulty trying to implement cycle analysis in their trading.
Steve was reluctant to jump into the project; the investing world was foreign to him. But eventually he was persuaded to take on the challenge. After more than a year of effort to reconfigure his algorithms to detect and evaluate patterns in financial markets, he discovered new methods of identifying hidden cyclic patterns that proved accurate for trading.
These discoveries led to today's Market Forecast. In the decades since, Steve has taught thousands of people around the world to use this tool and his unique methods to take control of their investing.