How Turner Capital Makes Market-Directional Investment Decisions

Turner Capital has developed a proprietary market-directional investment process based on the following:

  1. Market and Equity pricing trends can be measured with mathematical certainty, and

  2. Markets and Equities can be categorized as being in a bullish, transition or bearish trend, and

  3. Historical pricing volatility provides an excellent indicator of whether or not a prior trend has ended and a new trend has been established, and

  4. Based on the condition of the market, as mathematically determined by trend, an investment bias of bullish, neutral or bearish is used to make buy, sell or hold decisions.

Turner Capital Market-Bias Chart

The Market-Bias Chart (upper right) shows how the Market-Directional Model has performed over time.

All macro conditions (bullish, transition or bearish) are based on how and where the market is currently trending in relation to the "Transition Zone" (yellow band).

Portfolios tend to be fully invested in long-only positions when the market is above the Transition Zone and trending higher.

Portfolios are moved toward being in cash when the market is inside the Transition Zone.

Portfolios tend to be holding cash and inverse ETFs when the market is below the Transition Zone and trending lower.

The "Transition Zone" is a proprietary moving average based on pricing trend and historical volatility.

This methodology is utilized both for market trend analysis, as well as, individual stock/ETF buy/sell decision-making.

The black line in the chart above, represents the 10-year weekly closing price of the SPY. *

The yellow band is the Turner Capital proprietary Transition Zone.

The red line is how a theoretical investment in the SPY would have performed if the SPY were only held when the market was trading above the Neutral Zone

The green line is how a theoretical investment in the SPY would have performed if the SPY was held long when it was trading above the Neutral Zone, in cash when inside the Neutral Zone and shorted when it was trading below the Neutral Zone.

* Please note that any reference in the above videos to performance is hypothetical in nature and does NOT represent actual trading.  Past performance is not indicative of future returns and all of the performance numbers noted herein are purely theoretical and do not represent actual trades, the cost of trades, tax consequences or management fees.  No recommendation is being made to buy or sell any security.  Investing in the stock market involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. Nothing contained herein should be construed as a warranty of investment results. All securities trading, whether in stocks, options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. Turner Capital encourages you to read the investor information available at the websites of the Securities and Exchange Commission at www.sec.gov, the Financial Industry Regulatory Authority at www.finra.org, and the Options Clearing Corporation at www.optionsclearing.com