This article by Dr Roy Tipping was published in The IRS Report in July 2011.

Doom and gloom from TMR, but also some profits

In the March issue of The IRS Report (Issue 317) I mentioned that my computerised stock-picking system TMR was looking at May as a poor month for investment, with a mini-bear market on the cards. By the May issue the possibility of a severe set-back had receded, but it still looked as if the forthcoming month would be one for contemplation rather than speculation. So it proved - the FTSE100 declined by 1.5% in May and, as I write in late June, has fallen a further 5%.

If that is depressing, TMR is even more convinced that a major bear decline will start in January 2012, and this could be a big one of over 40%, with gloomy similarities in the present shape of the FTSE100 graph to its shape at the beginnings of 2001 and 2008, the starting points of the last two major bear markets.

At present the TMR portfolio uses stop-losses and lock-gains of between 30-40%, reported to subscribers in updated tables. For my own investments I shall be looking to tighten that figure to 15-20% if TMR doesn't show a more benign outlook by the beginning of September when I start my normal holiday season (and present my next article).

The first casualties of TMR's stern attitude have been Lloyds TSB which fell through its stop-loss of 48p for a loss of 30%, and Topps Tiles which fell through its gain-lock of 59p for a gain of 16%. Both shares now have "Negative" status and will be removed from the TMR portfolio.

Not all that TMR sees is gloomy: Latchways reported sparkling results and is up 17% on the May recommendation. Its gain-lock should be increased to 857p. Laird looks like being involved in a take-over tug-of-war and is also up 17% since May. Its gain-lock should be increased to 121p. Both shares retain their "Positive" status, though Laird keeps a slight reservation until its take-over is confirmed. All other stop-losses/gain-locks and statuses remain unchanged, for the time being.