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How Turner Capital makes Market-Directional Investment Decisions

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

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  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 the trend, an investment bias of bullish, neutral, or bearish is used to make buy, sell or hold decisions.

Source: Turner Capital Investments

The above chart represents Turner Capital Investment (TCI)'s assessment of certain market indicators as of the date so noted on the chart. The black line represents an unequal weighted percentage change of a composite of the following indexes: S&P 500 (40%), NASDAQ (40%), Russell 2000 (10%) and the DJIA (10%). The yellow band represents one-standard deviation of normal volatility above and below the 200-day moving average of the composite. The wider the band, the higher the volatility. Source: Turner Capital Investments, LLC.  This chart is provided for informational purposes and should not be relied upon when making any investment decision.  Provided solely for illustrative purposes.  Actual results may vary.

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

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All macro conditions (bullish, transition, or bearish) are based on how and where the market is currently trending.  The "market" (TMI) is defined as an unequally-weighted average of the S&P 500, the Dow, the Nasdaq, and the Russell 2000 indexes (black line).  The slope of the 40-week moving average of the market (yellow highlighted line on the chart), how the is how the TMI moves through the 20-wma, 10-wma, 5-wma and 40-wma, along with the TMI Histogram signal when to be bull-biased or bear-biased in trading activities.

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Portfolios tend to be fully invested in long-only positions when the TMI is above the 40-wma and the TMI Histogram is positive (green) and stepping higher.

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Portfolios tend to hold more cash and are more conservatively invested when the TMI is below the 40-wma and the TMI Histogram is negative (red) and stepping lower.

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

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* Please note that any reference 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

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