"Performance is important, but Process is critical." - Mike Turner
Hello Tayler,
This morning, the market opened down a bit, but after last week's meteoric rise, some reasonable pull-back is not overly surprising to anyone.
It is good to see how strong the move up has been in the current trade. Our Technical Equity rules and analysis software gave us a buy signal on April 25, 2025. As of this writing, our 1x clients are up +9.02% in the trade; our 2x clients are up +17.71%; and our 3x clients are up +28.01%. And the very good news is our exit is now well above the basis in each model, virtually locking in some great profits if/when this bullish trend comes to an end... and they all do come to an end at some point as you well know.
The plan this week is very straightforward... We know one datapoint of the several needed if a change in course is required by this coming Friday. We know how the market opened. Now, we wait to see how the rest of the week transpires. Will the open be the high? Will it be the low? Or (as is likely the case) will it be somewhere in between? For us to exit to the sidelines this week, the TMI (the market) will have to close strongly enough by this coming Friday below our predetermined exit trendline to cause us to move back to cash. This process (which is non-trivial) is designed to help us differentiate between volatility and a change in trend.
We have, thanks to the thousands and thousands of manhours of testing, managed to get the decision-making process of assessing where the market is and how it got there to put the odds in our favor regarding the determination of the difference between market volatility and a true change in trend.
Notice that I used the term "odds in our favor"... No one knows what the market is going to do next, but we do know with absolute certainty where the market is and how it got there. The key to getting out of the market at the best time is not by guessing or hoping or from fear or lack of optimism. The key to picking the right time to take profits is all about math. We have developed proprietary algorithms that give us the odds of whether the market is more likely to move one way or the other. We apply those odds to determining when to get into the market and when to get out. We want to get into the market when the odds of a trend continuing in the direction we want to take advantage of. We want to get out of the market when the odds of a trend likely ending is higher than we are willing to accept. It is all math. No guessing or hoping or blindly sticking to the lazy way of investing in the stock market... buy-and-hold.
If you are not a client of ours and you or your advisor are in a buy-and-hold investment strategy, congratulations! Right now, it is likely you are doing quite well, just like all of our current clients. But... and this is a big deal... if you do not have a plan and a set of rules already in place to tell you when to take risk off the table by taking profits instead of potentially losing all that you have gained... you should seriously consider our approach. Our strategy is designed to grow and protect client capital in bull markets like we are in now; as well as bear markets (and one is coming at some point).
The Turner Capital Total Market Index (TMI) stands as a pivotal tool in guiding our clients’ investment decisions, offering a comprehensive view that integrates key market components, including the S&P 500, Nasdaq 100, Russell 2000, and DJIA, albeit with an unequal representation tailored to our portfolio management methodology. This index not only informs our clients about optimal market entry and exit points but also enhances their strategic positioning within varying market conditions. The 50-week moving average serves as a crucial threshold, distinguishing between bullish and bearish market biases, which underscores our commitment to risk management.
The other trendlines provide actionable insights used to make informed decisions about the timing of when to be in the market and how to be in the market. The TMI Histogram is particularly instrumental, as it visually represents market strength—where green indicates bullish momentum and red signals bearish trends. The green shaded portions of the chart indicate a TMI Rules-based recommendation for a bullish trade; the red shaded areas indicate a TMI Rules-based recommendation for a bearish trade; and, the white shaded areas indicate a TMI-Rules based recommendation to be out of the market and in higher-yielding money market instruments.
