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The indicator that I wrote about in this article flashed a “12-Month Buy Signal” as of the close on 3/24/20.

Here is what that means and does not mean:

*Each of the previous 7 signals since 1990 has seen the market:

         -Decline further (ranging from -0.5% to -31.3%)

         -Stand higher 12 months after the buy signal (average gain +23.6%)

*While historical results are encouraging, investors should NOT view this as an “All Clear, it’s time to load up on stocks and ride the next big wave up” signal.  If anything, this should be considered as a “Weight of the Evidence” type of indicator.  In other words, it provides one potentially positive sign.  Nothing more, nothing less.

*For the record, I am not attempting to “call the bottom” and this is NOT me “issuing a buy signal.” This is me reporting on what has happened in the past following previous occurrences. The old adage, “Past performance is no guarantee of future results” is entirely applicable.

*We are still very much living in “perilous times” and just a quick reminder that the market fell another excruciatingly painful -31.3% in 3 months after the 2008 buy signal before reaching the ultimate bottom.

Previous signals appear in Figure 1.

Figure 1 – Previous JKHiLo 12-Month Buy Signals

Figure 2 displays recent signals

Figure 2 – Recent JKHiLo 12-Month Buy Signals (Courtesy AIQ TradingExpert)

Jay Kaeppel

Disclaimer: The information, opinions and ideas expressed herein are for informational and educational purposes only and are based on research conducted and presented solely by the author.  The information presented does not represent the views of the author only and does not constitute a complete description of any investment service.  In addition, nothing presented herein should be construed as investment advice, as an advertisement or offering of investment advisory services, or as an offer to sell or a solicitation to buy any security.  The data presented herein were obtained from various third-party sources.  While the data is believed to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information.  International investments are subject to additional risks such as currency fluctuations, political instability and the potential for illiquid markets.  Past performance is no guarantee of future results.  There is risk of loss in all trading.  Back tested performance does not represent actual performance and should not be interpreted as an indication of such performance.  Also, back tested performance results have certain inherent limitations and differs from actual performance because it is achieved with the benefit of hindsight.