See the bottom of this page for advice on how to read our charts
Would you like to be notified when this page is updated? Register below!
October 24, 2002
Dow Jones Industrial Average. Price: $8484.00
This chart remains negative because of the downward tilt of the price channel. That means prices will be lower one year from now. As long as the channel is tilted downward, long term investors should stay out of blue chip stocks. Notice that the red bar at the bottom of the chart indicates that the channel is still weakening. Timers have been in this market since the second week of October but the price is edging below the rising trendline. However, the cycle is about half way up to the top, indicating this indicator has some time left in it. For this to be a strong rally the price needs to continue to upward and rise above the high of August 21. If the price drops below the trendline significantly, Timers will get out of equities until the next cycle bottom. Long-term investors are out of blue chip stocks and will not re-enter until the channel turns to the upside. Timers are watching closely and are waiting for a cycle high.
Nasdaq Average. Price: $1317.93
The NASDAQ price is trending sharply downward and is enjoying a rally from a cycle bottom. Prices are negative for the year. Long term investors are on the sideline while Timers are looking for a signal to abandon their positions. Notice that the price is not dropping through the trendline as in the DJI chart. That would give Timers a reason to hold on. Long term investors will stay out of the market because of the negative trend of the price channel. Timers are holding.
T Bond Average Price: $107.62
Notice that the bond yearly channel is upward, making this market a holding for long term investors. However, the price hit the channel top along with a cycle high and the price has dropped sharply. Timers got out of this market when the price dropped through the rising trendline. They will probably buy back in when the price is at the cycle bottom. Expect more weakness. Short term investors are out of bonds but are watchful for a change. Long term investors are in bonds or money market.
Gold and Precious Metals price: $62.17
This is the Gold and Silver Index. This chart gives the reader a chance to see what precious metal stocks are doing. Notice that the channel is upward. Precious metal stocks have been doing well the past year but not for the past several months. The price has hit the channel bottom and turned upward. Channel bottoms are major support zones. The price has also crossed the descending trendline. That is a buy signal for short term investors. However, the cycle has not fallen into line and is a few weeks away from a cycle bottom. Long term investors are in this market as long as the price remains within the channel and the channel is tilted upward. Short-term investors are out considering an entry into this market, also.
Year to Date Return: 22.87%
On 10/7/02 Gold was the top mutual fund sector with 40.45% since January 1, 2002. US Government Bonds was the second ranked sector with a YTD return of 8.93%. The weakest sector is Science and Technology with a -51.43% for the YTD. We think it is important for you, as a mutual fund investor, to (a) know what the general market is doing, (b) what the mutual fund market sectors are doing, and (c) what the mutual funds related to those sectors are doing in your mutual fund family. It's an ABC approach to mutual fund investing. All our investment letters include bar charts on all the mutual fund sectors.
Municipal Bond 8/7/02)
It is also important to know what the top fund in your fund family is doing. Fidelity Select's American Gold is the top fund from our web page edition. It earned 43.64% in the past 12 months and -15.43% in the past 30 days. Notice that the price is headed to a channel bottom where is should strengthen. Short-term investors may move into this fund if the price crosses the trendline to the upside. Long-term investors have continued to add money as long as the channel is trending upward and the price stays within the price channel. Post prices to this chart and get familiar with this price action. The zig zag indicator at the chart bottom is a composite of several cyclic indicators and shows where they have been topping and bottoming. Use in conjunction with trendlines, the timer can get in at the right time and stay in for the short term move. All the mutual fund newsletters have this kind of information on all the funds. Investors should use our charts to post prices regularly (once per week is recommended). Check back during the month and see how this chart is doing. If your fund family's top fund matches the top mutual fund sector, you are probably on solid ground! Investors should post prices to this chart. They can get prices out of their daily newspaper or call their fund. Do you have a chart like this from your mutual fund family?
SOME ADVICE ON USING OUR CHARTS
The Prime Times Investor Price Channels tilt upward (green bull icon) or downward (red bear icon). Investors who want to protect their principal need only be certain that the price of their investment (fund) remains within The Prime Times Price Channel and that the channel is tilting upward. As long as it does that, the principal is safe. They should not be in investments where the channel is tilting downward. The actual risk the investor undertakes is from whatever price was paid when the investment was entered, to the channel bottom. That is why we ask investors to buy near the channel bottom --- and when the price rises upwards across a descending trendline. Also, the charts with the narrowest channels are the investments with the least risk to your dollars. Look at the charts. Doesn't that make sense? Then, if the investor wants to make money on the principal, the investment must be in a fund where the chart's channel of the price is tilting upward. The steeper the channel, the better. Doesn't that make sense?
Also, each investor must determine which kind of investor they are. Dollar Cost Averagers always add money at regular intervals (i.e., on pay days) to their mutual fund investments. With our charts, they will always add money as long as The Prime Times Price Channel of their mutual fund chart is tilting upwards (green bull icon). They will be cautious, or switch funds, when the price penetrates a channel bottom or when the channel tilts downward, and move to another fund that has a Prime Times Price Channel that is trending upwards for the year. Value Averagers buy funds and add money whenever the price of the fund is in the lower half of the Prime Times Price Channel. That way, they are buying the fund at a relatively low price. Of course, the channel must be trending upwards. They will switch mutual funds whenever the price drops below the channel bottom or when the channel begins tilting downwards (red bear icon). Timers will attempt to buy at Prime Times Channel bottoms and sell at channel tops. They will use the trendlines to time their investments more exactly. Timers will sometimes invest in downtrending funds that have reached support.
We also believe that investors should move from the general to the particular when considering investments. That is, the interested investor should FIRST know what the general market is doing. Are stocks, bonds, gold, or money markets the best place to be? That information is covered here and in the first two pages of our newsletter. SECOND, the investor should know which funds in the market or family are performing best. That requires a review of top funds or a review of the top funds within a fund family. We post a bar chart of the top funds at this web site. We also inform investors of the best funds within a family in our monthly newsletters. THIRD, the investor needs fundamental and technical information about these individual funds. Since most investors are already in a fund family that services all the important market sectors, we believe they should have fund charts and a newsletter that informs them about the best choices within that family. FOURTH, the investor should obtain a prospectus on the relevant funds from the fund family and invest money according to the investor's profile outlined above.
If you haven't subscribed to The Prime Times Investor, you probably don't have charts on your funds. We recommend you subscribe NOW. While additional information is available elsewhere, THIS TYPE OF INFORMATION IS AVAILABLE ONLY HERE.
