Timing the Market: How to Profit in the Stock Market Using the Yield Curve, Technical Analysis, and Cultural Indicators

by Deborah Weir

The first definitive guide to understanding and profiting from the relationship between the stock market and interest rates It's well established that interest rates significantly impact the stock market. This is the first book that definitively explores the interest rate/stock market relationship and describes a specific system for profiting from the relationship. Timing the Market provides an historically proven system, rooted in fundamental economics,...

• Format: Hardcover
• Language: English
• ISBN: 0471708984
• ISBN13: 9780471708988
• Release Date: November 2005
• Publisher: Wiley
• Length: 432 Pages
• Weight: 1.48 lbs.
• Dimensions: 1.4" x 6.4" x 9.2"

Customer Reviews

best book on market timing

I really like the book but after reading it you feel as you don't know what to do right away on the markets: no strict emphasis on practical trading. A must buy, waiting for a new hands-on title by Mrs D. Weir, check her great listmania

A useful book that delivers what the title promises.

I find this book very useful, as it gives you a clear and complete vision of the investment universe avalaible to anyone. Deborah explains her investment criteria in real market situations with the social, historical and economic details of every period. A very good point is that she provides tips on where to find the actual data she is using. It's written at basic level, combining fundamental (through the yield curve) and technical analysis with some cultural indicators. The first one is the backbone of the book. In short, I enjoyed it and it's global and practical approach.

Timing the Market . . it's just better

I'm a technology guy, so when asked if "something works", my response is often: "I don't know, let's try it." That's precisely what I did with this book. It actually inspired me to go out to the Fed's site, collect the data, crunch through some numbers, and make the trades myself going back to 1960. I only "traded" based on the information in the first two chapters (the heart of the book really) I used the 3 month / 10 year curve and the money market curve for buying back in. I really was surprised to find that I ended up with twice the money as the buy and hold portfolio even though my trade dates were slightly different than the author's (not by much, but I think the data differs a bit depending on your source) Bottom line for me: It seems that there is something to this yield curve stuff . . Sitting down and working through the math did teach me an important lesson though. The 1982 - 2000 Bull Market in stocks was an incredible thing - an unusual affair. After trudging through the volatility of the 1960s and 1970s that fact really leaps out at you. If you had simply bought stocks toward the end of 1981 and held on until about the middle of 2000 you would've reaped something like a 1200% gain by my estimates. In other words, the 1982-2000 Bull made things very easy for stock market investors and bailed out a lot of unsophisticated people. Will the future be so easy? I highly doubt it. And I wouldn't expect a bull market like the one we just saw anytime soon. This may render the simplistic "buy and hold" advice of old practically worthless. All the more reason to pay attention to what markets and the economy are doing. Bear markets can last a looooong time. It's worth making an effort to stay away from them if possible.

Easy and Clear

With the ease and clarity of a teacher, Deborah Weir expertly fuses three critical elements investors must use in making more informed buy and sell decisions. By incorporating her insights on market sentiment, the yield curve and cultural indicators, one will strengthen his and/or her future portfolio changes. The ability to be flexible in adding these disciplines will make the difference in your performance. And this book will help make that difference. Ralph J. Acampora, CMT Chief Technical Analyst Prudential Equity Group, LLC

Excellent trading foundation!

This work provides an excellent, professional grounding for one's approach to the markets. The theoretical basis for this foundation is ongoing analysis and interpretation of the U. S. treasury yield curve, bond quality spreads, and movements of the federal funds rate. The author's exposition of the yield curve is the best I've seen. She divides her analysis of the yield curve into short-term money market segments, the traditional spread between ten year bonds and three month bills, and longer-term bonds. Each of these segments affords the analyst important information as to the the present and anticipated state of the economy -- which determines the earnings expectations that drive markets. The second section of this book affords a somewhat different take on technical analysis than is usually encountered. The author explains how to use the volatility index (VIX) and the put/call ratio as indications of short-to-intermediate term market turning points. She also indicates how margin debt and short interest levels can be used to reveal long-term market highs and lows. The third section of the book describes cultural and demographic methods for gauging the market climate. These methods are qualitative only; subject to interpretational error; and questionable in the separation of "fact" from one's psychological projection. However, used strictly as adjuncts to yield curve analysis and technical indicator confirmation, they can be quite useful as further confirming tools. The fourth section describes how to use market timing in a profitable, top-down approach to riding the business cycle through rotation from fixed-income investments into equities, then hard assets, foreign currencies, and back into fixed-income instruments. The author details how intelligent asset rotation leads to more favorable portfolio results than does buy-and-hold over the long run. The market timing model which the author evolves over the course of the book substantially beats a buy-and-hold portfolio and does so while experiencing less volatility. The timing model's rationality, operations, and results are clearly explained and documented to facilitate a comprehensive understanding of her approach. This book is well-written. Its thesis is logical; well-developed; and supported with numerous examples, data, and around sixty pages of appendices. I feel that its methodology will help investors understand and identify forces which move markets as well as avoid those traps of crowd psychology which lead to participation in mass buying at market tops and mass selling at bottoms. This work is an interesting, original contribution to the literature of markets!