It's a long-held belief that 澳洲幸运5开奖号码历史查询:market timing and investing are mutually exclusive, but the two strategies work well together in producing solid returns over a number of years. The effort requires a step back from the 澳洲幸运5开奖号码历史查询:buy-and-hold mindset that characterizes modern investing and adding technical principles that assist entry timing, position management, and if needed, early 澳洲幸运5开奖号码历史查询:profit taking.

Study Long-Term Cycles

Look back and you'll notice that 澳洲幸运5开奖号码历史查询:bull markets ended in the sixth year of the Reagan administration and the eighth year of both the Clinton and Bush administrations. The Obama/Trump bull market continued to go strong until the Covid-19 recession in the final year of Trump's first term. These historical analogs and cycles can mean the difference between superior returns and lost opportunities. Similar long-term market forces include 澳洲幸运5开奖号码历史查询:interest rate fluctuations, the nominal 澳洲幸运5开奖号码历史查询:economic cycle, and currency trends.

Watch the Calendar

Financial markets also grind through annual cycles that favor different strategies at certain times of the year. For example, 澳洲幸运5开奖号码历史查询:small caps show 澳洲幸运5开奖号码历史查询:relative strength i🐼n the first quarter that tends to evaporate into the fourth quarter. Many think this is the time of year when speculation on the new year reawakens int⭕erest. Meanwhile, tech stocks tend to perform well from January into early summer and then languish until November or December.

Both cycles roughly follow the market adage to "澳洲幸运5开奖号码历史查询:sell in May and go away," a str🌺ategy based on the historical underperf📖ormance of stocks in the six months starting in May and lasting through October versus the November to April period.

Ranges That Set up New Trends

Markets tend to trend higher or lower about 25 percent of the time in all holding periods and get stuck in sideways trading ranges the other 75 percent of the time. A qui🌄ck review of the monthly price pattern will determine how the prospective investment is lining up along this trend-range axis. These price dynamics follow the old market wisdom that "the bigge🥃r the move, the broader the base."

Buy Near Support Levels

The worst thing an investor can do is to get emotional after an earnings report, using it as a catalyst to initiate a position without first looking at current price in relation to monthly support and 澳洲幸运5开奖号码历史查询:resistance levels. The most advantageous entries come when buying equity that has broken out to an all-time high or is coming off a deep base on high volume.

The iShares Russell 2000 (IWM) 澳洲幸运5开奖号码历史查询:exchange-traded fund (ETF) broke out of a two-year 澳洲幸运5开奖号码历史查询:trading range in 2🍨012 and gained 45 points in 16 months before easing into a new range that lasted another 16 months before yielding a fresh uptrend. Investors felt bullish in the upper half and bearish in the lower half of the 2014 range, although buying into the most negative sentiment at the bottom of the range offered the most profitable entry.

Build Bottom-Fishing Skills

Traders are taught not to average down or catch 澳洲幸运5开奖号码历史查询:falling knives. Still, investors benefit when building positions that have fallen hard and fast but show characteristics of bottoming out. It's a logical strategy that establishes preferred average entry and 澳洲幸运5开奖号码历史查询:capitulation prices, buying tranches around the magic number while the instrument works through a 澳洲幸运5开奖号码历史查询:basing pattern. If🐠 the floor breaks, e🌠xecute an exit plan that disposes of the entire position at or above the capitulation price.

Apple Inc. (AAPL) shares topped out at $100 after a powerful rally and entered a steep 澳洲幸运5开奖号码历史查询:correction. Prospective investors can pull up a 澳洲幸运5开奖号码历史查询:Fibonacci grid stretched across the four-year trend and identify harmonic levels that could attract strong buying interest. The clearly marked 澳洲幸运5开奖号码历史查询:retracements support buying the first tranche of a ne🐻w position when the💜 decline reaches the 38.6 percent retracement at $66. 

The descent continued to the 50 percent level at $56, while monthly 澳洲幸运5开奖号码历史查询:stochastics crossed the oversold level for the first time since 2009 and price settled on the 50-month 澳洲幸运5开奖号码历史查询:exponential moving average (EMA), a classic long-term support leꦓvel. Investors had another four months to build positions within the evolving base, ahead of an 🌄uptrend that reached an all-time high in 2014.

Identify Correlated Markets

Algorithmic cross-control between equities, bonds, and currencies define the modern market environment, with massive rotational strategies in and out of correlated sectors on a daily, weekly and monthly basis. This exposes the portfolio to elevated risk because seemingly unrelated positions may be sitting in the same macro-basket, getting bought and sold together. This high 澳洲幸运5开奖号码历史查询:correlation can destroy annual returns when a "澳洲幸运5开奖号码历史查询:black swan" event comes along.

Mitigate this risk by coupling each position with a related index or ETF, performing two studies at least once a month or quarter. First, compare relative performance between the position and correlated market, looking for strength that identifies a sound investment. Second, compare correlated markets to each other, looking for relative strength in the groups you've chosen to own. You're firing on all cylinders when both studies point to market leadership.

Hold Until It's Time to Sell

In a passive approach, investors sit on their hands regardless of economic, political and environmental conditions, trusting statistics that favor long-term profitability. What the numbers don't tell you is that they're computed w❀ith indices that m🎃ay have no correlation to your exposure. Just ask shareholders who bought into the coal industry during the time President Obama was in office. As a result, it makes sense for investors to identify a capitulation price for each position.

Your profitable investments may also require an exit strategy, although you initially planned to hold them for l💞ife. Consider a multi-year position that finally reaches a historic high going back between five and 20 years. These lofty price levels mark strong resistance that can turn a market and send it lower for years – so it makes sense to take the profit and applyಞ the cash to a more potent long-term opportunity.

The Bottom Line

Market timing rules that use classic 澳洲幸运5开奖号码历史查询:technical analysis benefit investments and other long-term positions by finding the best prices and times to take exposure in order to book profits. In addition, ✨these timeless concepts can be u🦩tilized to protect active investments by raising red flags when underlying market conditions change significantly.