Trying to time markets based on fundamentals data is the height of conceit.

I'm on record many times saying that the true fundamentals that move markets are unknown and unknowable.  But Wall St. makes billions advising the masses about how to time the markets.  And make no mistake, the only way to increase your purchasing power in the markets (i.e. win at gambling) is to engage in market timing.  Of course, people swimming in their own economic ignorance will say, "but I have made a lot of money in markets simply by buying the indices and holding".   To those people I will say the following:

- numbers in your electronic account are not wealth.  You have to sell out and get out (i.e. take delivery of your cash) in order to actually make out.  Many in the Madoff Ponzi thought themselves to be rich right up until the day it was exposed that he was running a Ponzi.  And then everyone but a select few woke up the next day to see their account had collapsed and that they actually had less money in the game than they originally put in.  When you take your cash out of your broker and hold it in your hand, THEN you can talk to me about what you made.  And not until.

- higher numbers in your account do not necessarily equate to more spending power.  While Zimbabwe's currency was dying (hyperinflating), their stock market was skyrocketing.  HOWEVER, if you do the analysis, the hyperinflation significantly outpaced the stock market gains, thus leading to a net loss of purchasing power regardless of the rising stock prices.



The only real way to relieve the next guy of his hard earned wealth in the markets is to make bank while the Ponzi is rising and then not be the last guy holding the empty bag when markets fall.  If you try to time the markets using so called fundamentals, you will eventually fail.  The reason for this is the same reason that the best minds in central banking can never time their economic stimulus properly forever.  They get it right a few times but eventually it catches up with them because they too think they know all the fundamental information needed to make these decisions.

This audio clip is Mike Maharry discussing this very thing regarding Chinese government rate manipulation but it applies to economic situations.  If you substitute "wall st" for "people's bank of china" in Maharry's diatribe, the essential logic remains intact with the point being that the true fundamentals that drive economic motion of any kind, including stock market movement, are unknown (we don't know what all of them are, what their weightings should be, what changes those weightings, etc.) and unknowable.  Man does not have the omniscience (perception of knowledge) nor the omnipotence to process it all in real time in order to make real time correct decisions.

Maharry quotes Hayak, a noted Austrian economist who died in 1992, who essentially said the same thing using a Hell of a lot more words:

"What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough.
If we possess all the relevant information,
if we can start out from a given system of preferences, and
if we command complete knowledge of available means, the problem which remains is purely one of logic. That is, the answer to the question of what is the best use of the available means is implicit in our assumptions. The conditions which the solution of this optimum problem must satisfy have been fully worked out and can be stated best in mathematical form: put at their briefest, they are that the marginal rates of substitution between any two commodities or factors must be the same in all their different uses.

This, however, is emphatically not the economic problem which society faces. And the economic calculus which we have developed to solve this logical problem, though an important step toward the solution of the economic problem of society, does not yet provide an answer to it. The reason for this is that the “data” from which the economic calculus starts are never for the whole society “given” to a single mind which could work out the implications and can never be so given.".

So Hayak correctly identified the fact that no single human mind has all the data, and "can never be so given".  Additionally, even if a single human mind had all the data, I assert that he would not know exactly what to do with it, how to process it, what to care about and what to ignore at what time of the year and under what mood of the herd.  That's really the difficult part: the effect that certain data sets have on the outcome are not always the same.  Modern day Keynesians think the economy is like an airplane.  You pull back on the stick and the nose goes up.  They thus think they are in complete control.  But it is the very essence of Austrian economics that these supposed controls works until they don't work, and then boy don't they.  In fact any pilot knows that if you just continue pulling back on the stick that the airplane stalls regardless of the fact that your engines are at full power.  And if you are flying too low and too slow when that happens, your plane is certainly going to crash. 

This is why market timing using fundamentals does not work.  The bulb burns brightest before it goes out.  But market timing is possible using the charts because the charts are nothing more than the history of moves made by the herd.  One mind can analyze the chart because the chart is all that matters.  The chart has encoded within it the mind of the herd.  And while a single human cannot possess or process all of the data needed to understand the future of the market, the herd taken as a collective can do this because the herd IS the market.

Most people have it all backwards.  The fundamentals cannot guide the future with any certainty but Elliott wave analysis of the charts does it all the time and at any degree of scale.  I prove this is true pretty much every day on my paid Elliott wave market timing subscriber's site.  For 2019 perhaps it is time for you to open your mind just a little bit to see what others are doing in these markets and how we are winning by doing it.

The monthly subscription is a paltry $39.95/month and you can cancel at anytime, no questions asked.   Monthly charges are handled automatically by your PayPal.  Thus, you have full control.  You want to stop the service?  Just go into your PayPal and stop the recurring payment.  I will get a notification and will remove your account automatically.  It's all very simple and safe.  I never know your credit card number.  Nobody can hack me and get your data simply because I don't have it!  PayPal handles it all.

Give it a try for a month.  What have you got to lose?  $39.95???