Understanding the Stock Market | Moon Run

Understanding the Stock Market

An understanding of the stock market

So, you’re new to the stock market or have been burned a few times. The ups and downs can get to you and the latest guru has not been much help. I know, reading tons of books are no help and you wonder if ANYONE knows anything about the stock market.

In 1987, Elaine Garzarelli called the crash, and everyone wanted to know how she did it. The bear markets in the 1970’s and 1929 were fresh in everyone’s minds and a 22% crash in one day rocketed the minds in Wall Street. Are there ANY answers to safety, selling out before the market craters?

Presently, index funds are popular because they have outperformed actively managed funds by a wide margin. 80% of managed funds underperform the averages, so Wall Street says, what the heck, give up a small percentage, you’ll come out ahead. So, easy comfort, right?

Here’s my reply. Sell to the sleeping point and take risk only when you understand what you are doing. The problem with the market is that when you lose, there is no understanding of WHY you lost. So, the market’s up. It’s down.

But also, I am a market timer. In 2022 I was down 10.40% according to Hulbert Ratings. I had the opportunity to short and was successful. Overall, though, it was a very tricky market. I have indicators that I rely on, calling bear markets and large corrections. Also, I called the crash in 2008 and won a first-place trophy in a real money contest.

What did I discover? After 16 years of analysis, I completed my work. 16 years! Is it worth all that time to find out what I did? What I wanted was an understanding of how the market works and how to make a profit. To my satisfaction, I can say that I did.

My timing model is 80% accurate, and my portfolios are optimized and work very well. I have done over 20% a year since September 2008 in my retirement account.

Using a timer, I have identified four signs of the market topping out:

Tsunami Indicator identifies when the market stalls out and the internals start falling apart
1) Fifty New Lows Rule identifies when the market is too high as when the number of new lows is at a high level
2) Accelerating New Lows identifies when the market is plummeting and you have to get out right away
3) Shortable Correction identifies everything else

The market turns around when there is a pulse in the market identified by the Pep Indicator.

Read my book, Before the Bear Strikes. Subscribe to the Moon Run Report, www.moonrunreport.com.

Bryan Johnson