Good Fortune Advisory - Trend Indicator

"Rough Road Ahead. Our Trend Indicator Shows A Market Peak Ahead And Then Another Major Decline. Read Why"

In January, 2009 I introduced my new Trend Long-term Indicator TLI. This indicator is the first I have found that will trade profitably both long and short positions.

TLI has bottomed and recovered, with a useful recovery ahead. But the current recession will drag it down to new lows. This is consistent with our Long Term-Value Indicator.

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Above we see TLI plotted above the S&P 500 Index. A buy signal is TLI greater than zero and a sell signal is TLI less than zero. Two TLI sell signals are marked ‘S’ and one buy signal by ‘B.’ These were well timed signals followed by very tradable trends over several years duration. The two points marked ‘W’ are whip-saw events; that is, sell-buy reversals with no follow through. These reversals would have resulted losses of a few percent.

An investment of $10,000 in September of 1986 would have grown to $30,873 by January, 2009 an annual return of 6.15% including the recent market decline. By following the TLI indicator with long purchases the $10,000 would become $60,356, an annual return of 8.46%. Aggressive trading, both long and short, would have produced $70,781, an annual return of 9.44%. It should be noted these are all hypothetical results. Even taking the whip-saws into consideration TLI has a remarkable historical record. It is quite likely future results will have more whipsaws, possible longer than several weeks.

One implication of following TLI would to remain out of the market for up to nine months after the completion of a significant market decline. Of course a money market fund would yield income during this period.

The purpose of this simple indictor is to keep us on the right side of the market trends that have a duration of at least a year. It is the best I’ve found in 20 years of market analysis.

This chart, along with full disclosure and trading rules, appears in my report Mastering The Market's Mind. Click here for the full story..