| Perhaps the oldest lament on Wall Street is, "If only they would ring a bell at the bottom of the market". Well, they do. Trouble is, they ring a lot of bells. Some days, in fact, the racket can drive you deaf. So with all the modesty we can muster, we would like to announce that we have finally solved the perpetually-tormenting problem of which bells to listen for. In what may someday be seen as the crowning achievement of his career, Dr. Leeb has distilled from the clatter and cacophony of the markets two indicators that forecast the direction of the markets with unparalleled accuracy. They neatly isolate the crucial factors that actually swing prices. The first indicator is our Short Term Key. It predicts market direction over the next four weeks. It's a statistical symphony of indicators. Any economist could think of all our indicators in five minutes. But figuring out the fomula to blend them correctly took Dr. Leeb 11 months of brain-burning work. Rest assured, no one else has our Short Term Key. It is an update and upgrade of Dr. Leeb's famous Master Key, which until now he has used exclusively in another publication. The last time we added up the record, it had correctly predicted the market 39 times out of 41. Our second indicator, the Long Term Key, is far, far simpler. It is designed to forecast market movement over the next 12 months. The Long Term Key is based on oil, specifically the price of a barrel of oil. For instance, if you had simply invested $1.000 in the S&P 500 in January, 1974, you would have made a $35,031 profit by the end of 2000. But if you had stayed out of the market during the five periods when oil prices were rising, you would have made $69,267.
Over the past 30 years, this measurement of oil has been a virtually perfect indicator.
Explanation of the Master Keys: SHORT TERM KEY The Short Term Key predicts market direction over the next four weeks. A range of -0.5 to 1.0 is neutral. The number indicates what percentage the market is anticipated to move over the next four weeks so a 3.2 reading indicates a 3.2% upward movement in the market over the next month. The historical extremes are approximately between -5.0 to +6.0. LONG TERM KEY The Long Term Key is based on oil, specifically the price of a barrel of oil. The Long Term indicator is a measure of oil price's year-over-year changes. For example, if oil prices are up 10% compared to last year, then the Long Term Key would read -10, as rising oil prices are a negative for the stock market. Any large spikes in the Long Term Key would be a bearish indicator. Historically, readings of -80 are associated with the start of bear markets.
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