In horse racing, a trifecta is a bet that nails the order of the first, second, and third finishers.
"Nobody can consistently 'time' the various markets," Saut cautioned.
"Yet if one 'listens' to the message of the markets, you can certainly decide if you want to be playing hard, or not so hard," he wrote. "We have been playing pretty hard since our model targeted the mid-February lows."
Here are the messages:
*An all-time high after a dry spell is usually good for stocks. In July, the S&P 500 clinched a fresh high for the first time since May 2015. Every other time that the index reached new highs at least 52 weeks after the old record, the average return in the following 12 months was 12.28%, Saut noted.
*The Coppock Curve, which measures how fast the S&P 500 is rising compared with 11 and 14 months ago, shows that it's a good time to buy. This is because the curve has moved from a negative to a positive position, meaning the S&P 500 is at a turning point on a longer-term basis.
*The Bollinger Bands have shrunk to one of the narrowest readings in decades. The bands are constructed two standard deviations from a 21-day moving average, up and down. Traders view a tightening of the bands as a sign that volatility is about to increase. In the six times they've narrowed since 1960, S&P 500 returns have been "significant" over the following year, Saut said.
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