I'm timing the market - who's in?

dealyboy

... my clock stopped ... too late :'(

NedS

MK62 said:

NedS said:

Ciprico said:

One of the main attractions  of col is the dividends

Have you factored this in.... 

All else being equal, the share price generally falls by the amount of the dividend on the date it goes ex-dividend, so the market takes care of it for me. If I sell some shares with a view to buying back at a lower price, and miss a dividend (5p per quarter), the share price will drop 5p on the ex-dividend date allowing me to buy back 5p cheaper offsetting the lost dividend payment. But yes, I have to factor in when considering any capital gains that I may make, some of that gain may be at the expense of lost dividend.

.....but now your buy back timing is constrained by the ex-dividend date.....probably not ideal when exercising your market timing plan.
TBH, I'm not sure CTY is that good a choice for this kind of strategy......it might pay off, but that juicy dividend, and it's psycholgical attraction, might muddy the waters on the timing........anyway, good luck and please keep the thread updated either way....🙂

Psychologically maybe, but all the dividend is doing is returning my own capital to me in cash in the short term. For example, the share price is 420p, shares go ex-dividend at 5p per share, the share price drops to 415p and I now have a promise to pay me 5p in a couple weeks.

If I don't hold any shares, I don't suffer the 5p share price fall (loss) but equally I don't benefit from receiving the 5p dividend (gain). Whether I hold shares or not, the net effect is nil.

Audaxer

NedS said:

MK62 said:

NedS said:

Ciprico said:

One of the main attractions  of col is the dividends

Have you factored this in.... 

All else being equal, the share price generally falls by the amount of the dividend on the date it goes ex-dividend, so the market takes care of it for me. If I sell some shares with a view to buying back at a lower price, and miss a dividend (5p per quarter), the share price will drop 5p on the ex-dividend date allowing me to buy back 5p cheaper offsetting the lost dividend payment. But yes, I have to factor in when considering any capital gains that I may make, some of that gain may be at the expense of lost dividend.

.....but now your buy back timing is constrained by the ex-dividend date.....probably not ideal when exercising your market timing plan.
TBH, I'm not sure CTY is that good a choice for this kind of strategy......it might pay off, but that juicy dividend, and it's psycholgical attraction, might muddy the waters on the timing........anyway, good luck and please keep the thread updated either way....🙂

Psychologically maybe, but all the dividend is doing is returning my own capital to me in cash in the short term. For example, the share price is 420p, shares go ex-dividend at 5p per share, the share price drops to 415p and I now have a promise to pay me 5p in a couple weeks.

Just wondering why you picked CTY for this timing experiment rather than a more volatile IT, like for example Merchants?

NedS

Ciprico said:

..paying .5% stamp duty is an unnecessary drag which could be avoided by using an ETF or oeic.

Also you're taking a currency risk with UK based fund

HMWO has nice regular peaks and troughs and would avoid stamp duty... 

Are you going to buy sell purely on price or news events too... 

For example when peace is declared in Ukraine or US and China stop squabbling there should be major uplifts you wouldn't want to miss

Is china's reduced covid policy good or bad...  If it works and factories go to full pruduction or it fails and the country falls apart
could have big and sudden impact....

Good luck... Its an interesting and tempting experiment.... 

Yes, I absolutely agree and ETF that tracks a chosen index, without the drag of stamp duty would be better.

Your other points are also equally correct, of course major news and macro events undoubtedly drive markets, and I'm sure there will be times where I get things wrong.

I try to make decisions based on probability - markets are at or near a high so I think there is more probability price will fall from here than rise, and then try to run your winners and cut any losing positions. I don't need to be right every time, I need to be right more than I'm wrong, and/or I need to make more when I'm right than I lose when I'm wrong.

Markets can only go in one of two directions, but it doesn't have to be a binary bet and I can scale in or out based on probability. ATM I feel there is maybe a 70% chance of a fall from current SP in the short term and a 30% chance of a further rise - so I sold some of my holding. If the price now rises further in the next week or two, the probability of a fall increases and the probability of yet further rises reduces, so I sell more or all (markets cannot rise indefinitely). I don't need to accurately predict the top and bottom of every wave, I just need to capture some of that volatility.

NedS

Audaxer said:

NedS said:

MK62 said:

NedS said:

Ciprico said:

One of the main attractions  of col is the dividends

Have you factored this in.... 

All else being equal, the share price generally falls by the amount of the dividend on the date it goes ex-dividend, so the market takes care of it for me. If I sell some shares with a view to buying back at a lower price, and miss a dividend (5p per quarter), the share price will drop 5p on the ex-dividend date allowing me to buy back 5p cheaper offsetting the lost dividend payment. But yes, I have to factor in when considering any capital gains that I may make, some of that gain may be at the expense of lost dividend.

.....but now your buy back timing is constrained by the ex-dividend date.....probably not ideal when exercising your market timing plan.
TBH, I'm not sure CTY is that good a choice for this kind of strategy......it might pay off, but that juicy dividend, and it's psycholgical attraction, might muddy the waters on the timing........anyway, good luck and please keep the thread updated either way....🙂

Psychologically maybe, but all the dividend is doing is returning my own capital to me in cash in the short term. For example, the share price is 420p, shares go ex-dividend at 5p per share, the share price drops to 415p and I now have a promise to pay me 5p in a couple weeks.

Just wondering why you picked CTY for this timing experiment rather than a more volatile IT, like for example Merchants?

Simply because I hold/held 17,000 shares of CTY in my portfolio and no shares in MRCH. I have no doubt my choice is not optimal, hopefully people can see through that. If you want to play along, by all means choose a vehicle of your choosing.

If I can be successful with a sub-optimal vehicle, then selecting a more volatile investment without stamp duty drag will simply magnify any returns. It's easy enough to add 0.5% x number of purchases to my returns (or losses) at the end of the year

NedS

No trades this week.

I have been busy this week so I set a somewhat speculative (greedy?) sell limit at 426.5p for the remaining 10,000 shares - looks like I just missed hitting that today by a whisker. I'd be happy to sit things out for a while as I see more downside risk at this point than upside gains with prices at current levels, but we still hold our remaining 10,000 shares for now. Lets see what Monday brings - I'm hoping I'll have more time next week to sit in front of the PC and watch prices. The intention to sell remains above 425p

Also HL are now paying 1.9-2.1% interest on cash held at the level I would be holding after a sale, so just wondering if I should factor that into my calculations when working out the profit/loss on a trade. I have trading fees and stamp duty, but also I'm not paying platform fees and earning interest on cash when out of the market. It's probably no more than a rounding error over shor periods of time so maybe not worth worrying about.

coastline

coastline said:

NedS said:

Linton said:

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

Interesting point, but little effect I suspect as the net result is that the trust SP performs close to NAV, and NAV performs close to it's constituent market (e.g, FTSE100) so in every practicable sense we are tracking/trading the FTSE100, which just like CTY broadly trades sideways in a window and pays a hefty dividend.

I agree CTY behaves like a closet tracker and there's very little between the two chart patterns over many years. Volatility creates opportunities to trade that's why I stick to my system . There's no predictions and no targets just trying to ride the waves. It's not day trading where you can easily get wiped out. Again not the best illustration below but those indicators at the extremes can produce respectable gains . In just 2 years there's dozens . Always another chance coming along. 

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

Posted this one before with the SP500 . SP500 stochastic is low but the FTSE is high. ?? I wonder ? US tend to run the show.

$SPX | SharpCharts | StockCharts.com

My comments at the bottom of the post about the SP500 and the stochastic indicator sitting right on the oversold or buy alert have played out this week. FTSE or CTY ? have continued to hold up a I suggested , US up generally the rest up.
Here's last Thursday when I posted.

spdaily5 jan5.png (640×640) (googleusercontent.com)

Here we are today with the stochastic sitting bang on the overbought zone . After a rally what next ? Sit tight above the 10 day moving average in red on the chart.

$SPX | SharpCharts | StockCharts.com

FTSE/CTY still above the 10 day moving average . HOLD.

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

NedS

coastline said:

coastline said:

NedS said:

Linton said:

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

Interesting point, but little effect I suspect as the net result is that the trust SP performs close to NAV, and NAV performs close to it's constituent market (e.g, FTSE100) so in every practicable sense we are tracking/trading the FTSE100, which just like CTY broadly trades sideways in a window and pays a hefty dividend.

I agree CTY behaves like a closet tracker and there's very little between the two chart patterns over many years. Volatility creates opportunities to trade that's why I stick to my system . There's no predictions and no targets just trying to ride the waves. It's not day trading where you can easily get wiped out. Again not the best illustration below but those indicators at the extremes can produce respectable gains . In just 2 years there's dozens . Always another chance coming along. 

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

Posted this one before with the SP500 . SP500 stochastic is low but the FTSE is high. ?? I wonder ? US tend to run the show.

$SPX | SharpCharts | StockCharts.com

My comments at the bottom of the post about the SP500 and the stochastic indicator sitting right on the oversold or buy alert have played out this week. FTSE or CTY ? have continued to hold up a I suggested , US up generally the rest up.
Here's last Thursday when I posted.

spdaily5 jan5.png (640×640) (googleusercontent.com)

Here we are today with the stochastic sitting bang on the overbought zone . After a rally what next ? Sit tight above the 10 day moving average in red on the chart.

$SPX | SharpCharts | StockCharts.com

FTSE/CTY still above the 10 day moving average . HOLD.

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

As much as I like chart analysis, the bit I can never quite reconcile is the lag. For example, by the time price has fallen below the 10 day moving average, or MACD/STO indicators turn, it's already dropped a chunk and I'm kicking myself because my gut told me it was toppy last week. Of course sometimes my gut is wrong and it takes another step up. But I take solace still holding 10,000 shares given your HOLD recommendation

Lets try a challenge - you track a notional £100k in FTSE/CTY using your method and we see where we each end up at the end of the year?

coastline

NedS said:

coastline said:

coastline said:

NedS said:

Linton said:

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

Interesting point, but little effect I suspect as the net result is that the trust SP performs close to NAV, and NAV performs close to it's constituent market (e.g, FTSE100) so in every practicable sense we are tracking/trading the FTSE100, which just like CTY broadly trades sideways in a window and pays a hefty dividend.

I agree CTY behaves like a closet tracker and there's very little between the two chart patterns over many years. Volatility creates opportunities to trade that's why I stick to my system . There's no predictions and no targets just trying to ride the waves. It's not day trading where you can easily get wiped out. Again not the best illustration below but those indicators at the extremes can produce respectable gains . In just 2 years there's dozens . Always another chance coming along. 

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

Posted this one before with the SP500 . SP500 stochastic is low but the FTSE is high. ?? I wonder ? US tend to run the show.

$SPX | SharpCharts | StockCharts.com

My comments at the bottom of the post about the SP500 and the stochastic indicator sitting right on the oversold or buy alert have played out this week. FTSE or CTY ? have continued to hold up a I suggested , US up generally the rest up.
Here's last Thursday when I posted.

spdaily5 jan5.png (640×640) (googleusercontent.com)

Here we are today with the stochastic sitting bang on the overbought zone . After a rally what next ? Sit tight above the 10 day moving average in red on the chart.

$SPX | SharpCharts | StockCharts.com

FTSE/CTY still above the 10 day moving average . HOLD.

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

As much as I like chart analysis, the bit I can never quite reconcile is the lag. For example, by the time price has fallen below the 10 day moving average, or MACD/STO indicators turn, it's already dropped a chunk and I'm kicking myself because my gut told me it was toppy last week. Of course sometimes my gut is wrong and it takes another step up. But I take solace still holding 10,000 shares given your HOLD recommendation

Lets try a challenge - you track a notional £100k in FTSE/CTY using your method and we see where we each end up at the end of the year?

I agree there's different approaches to this sometimes I pull the trigger early. Not the best chart indicators below and I suggested use the IC website but you get the picture. Lower indicators were overbought by November but stayed overbought. Could have sold but way too short. This is where a stop loss or 10 day moving average comes in. December before the 10 day turned down and 5% more in the bag. Basically mechanical system and a bit of gut feel. Entry points I tend to buy when system is oversold then hold using the 10 day average as the guide. Nothings perfect otherwise we'd all do it but there's basically buying and selling points many times every year. Always a chance to make a short term gain. At the end of the day the global MSCI World Index has averaged just over 10% since launch to me that's my benchmark.

 FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

Yes I'll give it a go with the FTSE notional £100K I've done it before and the challenge came from a poster on here . Never replied to my system as I posted the results. Made money in a falling market it doesn't have to be going up just need the waves and a bit of volatility. 1350 points on the FTSE and the index itself only up 200.

Economy crash =/= stock market crash? - Page 40 — MoneySavingExpert Forum

NedS

coastline said:

NedS said:

coastline said:

coastline said:

NedS said:

Linton said:

I am not sure how it affects this cunning wheeze but it is interesting to note that CTY has a deliberate strategy to keep the discount to NAV within tight bounds and reduce volatility, issuing shares when the price is too high and buying back when the price is too low. Apart from managing the share price this strategy provides existing investors with a bit extra return by selling  high and buying low.   All is explained in the Annual Report.

I wonder what affect this has on chartist's predictions?

Interesting point, but little effect I suspect as the net result is that the trust SP performs close to NAV, and NAV performs close to it's constituent market (e.g, FTSE100) so in every practicable sense we are tracking/trading the FTSE100, which just like CTY broadly trades sideways in a window and pays a hefty dividend.

I agree CTY behaves like a closet tracker and there's very little between the two chart patterns over many years. Volatility creates opportunities to trade that's why I stick to my system . There's no predictions and no targets just trying to ride the waves. It's not day trading where you can easily get wiped out. Again not the best illustration below but those indicators at the extremes can produce respectable gains . In just 2 years there's dozens . Always another chance coming along. 

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

Posted this one before with the SP500 . SP500 stochastic is low but the FTSE is high. ?? I wonder ? US tend to run the show.

$SPX | SharpCharts | StockCharts.com

My comments at the bottom of the post about the SP500 and the stochastic indicator sitting right on the oversold or buy alert have played out this week. FTSE or CTY ? have continued to hold up a I suggested , US up generally the rest up.
Here's last Thursday when I posted.

spdaily5 jan5.png (640×640) (googleusercontent.com)

Here we are today with the stochastic sitting bang on the overbought zone . After a rally what next ? Sit tight above the 10 day moving average in red on the chart.

$SPX | SharpCharts | StockCharts.com

FTSE/CTY still above the 10 day moving average . HOLD.

FTSE 100 Index, UK:UKX Advanced Chart - (FTSE UK) UK:UKX, FTSE 100 Index Stock Price - BigCharts.com (marketwatch.com)

As much as I like chart analysis, the bit I can never quite reconcile is the lag. For example, by the time price has fallen below the 10 day moving average, or MACD/STO indicators turn, it's already dropped a chunk and I'm kicking myself because my gut told me it was toppy last week. Of course sometimes my gut is wrong and it takes another step up. But I take solace still holding 10,000 shares given your HOLD recommendation

Lets try a challenge - you track a notional £100k in FTSE/CTY using your method and we see where we each end up at the end of the year?

I agree there's different approaches to this sometimes I pull the trigger early. Not the best chart indicators below and I suggested use the IC website but you get the picture. Lower indicators were overbought by November but stayed overbought. Could have sold but way too short. This is where a stop loss or 10 day moving average comes in. December before the 10 day turned down and 5% more in the bag. Basically mechanical system and a bit of gut feel. Entry points I tend to buy when system is oversold then hold using the 10 day average as the guide. Nothings perfect otherwise we'd all do it but there's basically buying and selling points many times every year. Always a chance to make a short term gain. At the end of the day the global MSCI World Index has averaged just over 10% since launch to me that's my benchmark.

Yes, I used to run a points-based system where I would assign a score to each indicator (price above SMA, black above red on MCAD, STO oversold etc), and then use the weighted total score normalised to a percentage to set my risk exposure. So if my system scored the markets at 7/10, I'd adjust allocation to 70% risk on for whatever index I was scoring and 30% cash. So this was a more granular approach than simply all in or all out, and allowed allocations to be adjusted based on risk as measured by chart analysis.

coastline said:

Yes I'll give it a go with the FTSE notional £100K I've done it before and the challenge came from a poster on here . Never replied to my system as I posted the results. Made money in a falling market it doesn't have to be going up just need the waves and a bit of volatility. 1350 points on the FTSE and the index itself only up 200.

Great. What's your opening position then? Can I suggest you pick an ETF to track the index and add notional costs of £12.95 per trade so we are comparing like for like (accepting I also have 0.5% stamp duty on purchases) and we will compare percentage gains at the end of year.