How I Gamble In the Stock Market
By Tom Findley

Making money in the stock market is easier than tying my shoes

I have learned to look for the Asset Bubble

Trading results since 01/01/05:

Quarter Ending Date

Stock Accounts Value

Additions or Taxes Paid

03/31/2019

$130,858.00

.00

12/31/2018

$61,613.00

+$19,000.00

09/30/2018

$74,911.00

.00

06/30/2018

$72,508.00

.00

03/31/2018

$68,950.00

+$20,000.00

12/31/2017

$89,195.00

.00

09/30/2017

$100,690.00

.00

06/30/2017

$79,164.00

.00

03/31/2017

$87,657.00

+$5,000.00

12/31/2016

$124,531.00

+$521.00

09/30/2016

$56,862.00

+$500.00

06/30/2016

$64,461.00

+$5,000.00

03/31/2016

$43,078.00

$.00

12/31/2015

$50,606.00

+$6,944.00

09/30/2015

$59,967.00

+$4,000.00

06/30/2015

$48,761.00

+$2,500.00

03/31/2015

$53,900.00

+$5,500.00

12/31/2014

$41,374.00

$.00

09/30/2014

$53,300.00

$.00

06/30/2014

$77,874.00

+$8,600.00

03/31/2014

$69,828.00

+$1,500.00

12/31/2013

$51,828.00

.00

09/30/2013

$22,595.00

+$2,500.00
All in FNMA and FMCC

06/30/2013

$22,159.00

+$5,050.00
All in FNMA and FMCC

03/31/2013

$30,849.00

+$1,500.00

12/31/2012

$38,610.00

+$14,000.00

09/30/2012

$19,633.00

+$6,000.00

06/30/2012

$13,476.00

.00

03/31/2012

$11,808.00

.00

12/31/2011

$12,097.00

.00

09/30/2011

$15,415.00

+$5,000.00

06/30/2011

$38,026.00

+$5,000.00

03/31/2011

$40,840.00

+$6,000.00

12/31/2010

$31,144.00

.00

09/30/2010

$34,768.00

.00

06/30/2010

$25,405.00

.00

03/31/2010

$39,045.00

+$6,000.00

12/31/2009

$36,828.00

+$7,500.00

09/30/2009

$33,656.00

.00

06/30/2009

$49,735.00

.00

03/31/2009

$61,051.00

+$18,000.00

12/31/2008

$29,113.00

.00

09/30/2008

$61,792.00

.00

06/30/2008

$84,156.00

-$17,000.00 Taxes Paid and car bought

03/31/2008

$92,503.00

BDCO collapsed.

12/31/2007

$112,937.00

BDCO was a big mistake.

9/30/2007

$151,347.00

$18,000.00

6/30/2007

$105,449.00

.00

3/31/2007

$126,247.00

.00

12/31/2006

$123,259.00

$5,000.00

9/30/2006

$110,018.00

$20,000.00

6/30/2006

$87,148.00

.00

3/31/2006

$95,164.00

$10,000.00

12/31/2005

$95,627.00

.00

9/30/2005

$71,938.00

.00

6/30/2005

$61,935.00

.00

3/31/2005

$57,367.00

$4,500.00

12/31/2004

$63,667.00

.00

The previous trading strategies I tried turned out to be too much monkey business.

The new strategy I developed consists of 3 parts:

1. I learned that there is a Stock Market Cycle that keeps repeating itself. It is like the Business Cycle, which has 4 phases. Link to description of the Business Cycle.

2. Instead of losing money by trading individual stocks, I am now trading Exchange Traded Funds that track the Nasdaq 100 Index.

Link to list of stocks in the Nasdaq 100 Index.

Here are the 2 ETFs I am using:

SQQQ : This ETF rises when the market goes down.

TQQQ : This ETF rises when the market goes up.

These ETFs were created in 2010. TQQQ has been rising since then, and SQQQ has been declining.

3. I began drawing Trend Lines on the Nasdaq 100 chart to determine trading ranges and Market Cycle changes of the Index. Link to drawing Trend Lines.

The 4 phases are based on changes in Federal Reserve Discount Rate Policy.
Link to Federal Reserve Bank Discount Rate changes.

I have gotten several charts showing the market peaks and bottoms going back to 1918.
I drew trend lines along the high and low points of the DJIA and NDX.

Link to Market Cycle Stock charts for DJIA and NDX.

The Expansion Phase starts after the previous Trough Phase. The Expansion starts when the Discount rate is under 1%, and the Index has risen above its 50 day moving average. This last occurred in March of 2009. This was the time to buy TQQQ if it had existed.
As at least 2 high and low points occur on the chart, it is time to start drawing trend lines to show the upper and lower limits of the Index trend. There will be small uptrends and downtrends within the trend lines. Many people wonder where the market is headed at these times. News media is of no help. I have checked the index charts enough that I have seen the direction stop and go the other way when the upper or lower trend line is reached.
At some point, the index will rise above the projected upper trend line. This is the Asset Bubble forming, and a signal that Market Peak Phase is in sight.

The Peak Phase
The Federal Reserve Discount rate is at least 5%.
When the Index peaks and drops below its 50 day moving average, the Peak Phase is over, and the Contraction Phase begins. It is time to sell TQQQ and buy SQQQ.

The Contraction Phase
The NDX drops below its 50 day moving average, and continues to drop.
The Federal Reserve will start to lower interest rates. Eventually the Federal Reserve Discount Rate is at 1% or less.

The Trough Phase
At some point, the NDX bottoms and starts to rise. When it rises above its 50 day moving average, the Market Trough Phase is complete. I will sell SQQQ and buy TQQQ again.
Then a new Market Expansion phase starts.

The market increase is slow and gradual, while the decline is short and sharp.
Since 2009, the market has gone up as interest rates slowly increased. I expect that the same process will continue until the Fed starts to lower interest rates, then the market will decline.

Link to spreadsheet showing Discount rate changes, plus the yearly changes in the value of the SPY, Nasdaq, and the ETFs SQQQ and TQQQ.
I compare these results to those of my previous trading strategies, which resulted in going from $250,000 to zero.

Link to Fred's Stock Trading Report
Listen to this on Mondays after 4 PM when the market closes down.

Link to Fred's Interview with Ben Bernanke