Streetsmart Guide to Timing the Stock Market: When to Buy, Sell and Sell Short

THE STREETSMART GUIDE TO TIMING THE STOCK MARKET explains for all investors how basic technical tools—well-known and popular in the futures market—can show you how to make the most of stock market opportunities. Using key indicators from the futures market, leading futures trader and advisor Colin Alexander has developed an innovative decision-making system for determining which stocks to buy and how to recognize when those stocks are poised for an upward move.

Case studies for market leaders, including IBM, Citicorp, Schlumberger, and others, demonstrate the book's techniques in action, and show the value of technical analysis in predicting stock movements. This groundbreaking system, similar to work done by John Murphy, Richard Dennis, and other legendary futures traders, will show you how to: Buy only those stocks most likely to have above-average performance; Run your profits and cut your losses; Sell when either the stock or the market is running out of steam; Monitor the risks—as you let the rewards take care of themselves; Take personal responsibility for your investments. That last point bears repeating. You wouldn't for one second think of driving a car without oil or going sailing without checking the weather. Yet that is precisely what the proponents of buy-and-hold would have you do: buy a stock or a mutual fund and hold it forever, ignoring cycles and trends which, quite frankly, could be understood and acted upon with a minimum of research.

THE STREETSMART GUIDE TO TIMING THE STOCK MARKET shows you how to conduct that research, and profit from the stock market's cycles and long-term trends. Whether you use its techniques to buy high-tech stocks or blue chips, you will effectively take control of your investments. Market timing secrets learned in THE STREETSMART GUIDE TO TIMING THE STOCK MARKET will give you renewed confidence and optimism. This breakthrough book makes advanced market timing techniques understandable—and makes it possible for you to achieve long-term returns superior to those of indexing, mutual funds, or buy-and-hold strategies.

He also is fond of uncovered puts, as a viable option strategy -- unfortunately, this strategy does not work out over the long term; you make steady small profits until you encounter a 10+ sigma event in the market, and get blown out. The lessons of LTCM and Niederhoffer should not be forgotten, especially given that equities markets trend far more than one would assume based on a log normal distribution. High probability trades are not always good trades!

I'm trying to get a handle on the intended audience of this book. It seems to be intended for people new to a technical approach to the market, and if that's the case, I don't think it'd make it to my top 100 list of such books. If someone is new to technical approaches, i'd probably recommend the much smaller (and in my view, much more useful) The Visual Investor by John Murphy.

Overall, I think this book should be avoided like the plague. There's nothing new in this book, just rehashed age-old advice, some of which is dubious, some of which is good.


Outstanding   July 3, 2003
Glenn L. E. May (Islington, Ontario Canada)
3 out of 6 found this review helpful

This book is a tremendous gift to future generations and should be the basis of a mandatory course for everyone in highschool. If it were already, many of my friends and acquaintances would not have lost their fortunes in the last 3 years' bear market.
There is a mountain of great advice and detailed checklists for buying, selling and shorting stocks. Some of my favourite quotes are as follows:

-"The mutual fund industry constantly trumpets from the rooftops the merits for the long term...However the benefits...diminish significantly when capital is constantly eroded by transaction costs and withdrawals to pay capital gains tax...Dickens observed that 'the business of lawyers is making business for lawyers.' Things do not change. The investment business is not immune to mutual back-scratching at the expense of the public...There is no doubt that the rapid turnover of stocks is one reason why so few funds come close even to equaling the performance of the stock indexes."

-"Never put a large amount of money into stocks all at once."

-"Buy bonds for retirement when you are retired."

-"It is as important to know when to sell a stock, or when to sell it short, as when to buy it."

-"It is an absolute certainty that in the future there will be stock market declines similar to the one in 1987. Some will be more severe and some will last much longer." [Alexander's book was published in 1999 before the major bear market of 2000 -...]

-"During a general bear market put [ALL] your money into cash equivalents like Treasury Bills until the storm blows over...Contrary to popular belief, for all practical purposes there are no stocks to own when the general direction of the market is down."

-"There is certain to be a sell signal for every stock you ever own...Warren Buffett...has shown that the stated policy of the mutual fund industry ['buy and hold'] does in fact work...in a bull market"!

"The market is always right; you either make money or you lose it!"

-"It often happens that the stock that doubles once goes on to double again...the greatest stocks always look expensive."

-"Buy strength, not weakness!"

-"Do not buy many different stocks...Aimless diversification merely increases the liklihood of investing in fewer great stocks."

-"Always place an initial protective stop as soon as you buy a stock."

-"A Lindahl price rule and a double reversal price rule are particularly powerful indicators of the potential for a stock to make a substantial move."

-"You should never own a stock making a new 52 week low but you might well consider selling it short."

-"In a general bear market you should generally do nothing but sell short, if you are in the market at all."

-"The downside [in] writing options is [they are] a waste of time compared with owning stocks like Microsoft and Intel when stocks are really running."

The book has many more gems and concrete action plans. It is the most useful book for the public I have ever read. It should top Hillary Clinton's autobiography and Harry Potter, but, regrettably, it won't! People will continue to listen to their liars - their brokers, financial planners and mutual fund salespeople, regrettably. A few will read the book, and be wiser, and richer!