|
Current Signal Performance
|
|
|
Turbo Signal
|
Trade Date
|
Turbo Model Returns (Long & Short Strategy)
|
|
|
|
|
Nasdaq 100
(QQQ)
|
Russell 2000
(IWM)
|
S&P 500
(SPY)
|
|
|
|
|
|
Classic Signal
|
Trade Date
|
Classic Model Returns (Long & Short Strategy)
|
|
|
|
World
|
Nasdaq 100
(QQQ)
|
Russell 2000
(IWM)
|
S&P 500
(SPY)
|
|
|
|
|
|
Increased selling pressure forced stocks to retreat this week. Equities started their slide Monday as rising oil prices took their toll, yielding the Nasdaq Composite a 1.4% drop. The major averages managed to recoup a portion of their losses during the next session, helped by a rally in financials after Bank of America issued a bullish profit forecast. Yet, stocks started to weaken again Wednesday on continued worries over the conflict in Libya and a poor showing by the semiconductor sector. A slew of negative news hit the market before the open Thursday: weekly jobless claims data came in worse than anticipated, a downgrade of Spain's credit rating by Moody's put pressure on european stocks and China reported slowing export growth, raising worries over the sustainability of the global recovery. Investors sold heavily as a result, causing the S&P 500 to shed 1.9% on increased volume. News of a massive earthquake in Japan pushed the main indexes lower early on Friday, but a decline in oil prices helped equities turn around to finish the session in the green, with the Nasdaq Composite posting a 0.5% daily gain on light trade.
The S&P 500 (SPY), Nasdaq 100 (QQQQ) and Russell 2000 (IWM) respectively lost 1.23%, 2.55% and 2.74% over the five-day span. If the S&P 500 and Russell 2000 ETFs remain located above both their 50-day and 200-day exponential moving averages (EMAs), the Nasdaq 100 ETF closed the week just below its 50-day EMA.
For its part, our World portfolio posted a 2.77% loss over the five-day span. The portfolio consists of the 5 top-ranked world ETFs as of February 25, which marked the beginning of the current 4-week holding period. Please note that since we have an active Classic Model Cash signal, the World approach calls for selling your holdings if you follow the "Long Only" or "Long and Short" strategy. Only if you follow the "Buy and Rebalance" strategy should you remain invested in the top 5 ETFs, as the strategy calls for staying invested at all times. Please go to the Classic Model "Description" page for all the details.
Our current Classic Model Cash signal and Turbo Model Buy signal remain in effect.
Bull-bear
battle heats up
First, we would like to thank everyone for their kind comments regarding
our new Turbo Model. We are very excited about our new addition
to the TimingCube family, and look forward to great results from
Turbo going forward. One of the most frequent questions we are receiving
since the Turbo launch is how to handle trading in the current environment.
Last week, we discussed the benefits of a dollar-cost averaging
approach to beginning with Turbo. We believe that is a very good
way to go as we never know how long it will be until the next signal.
That has been especially true this past month as the market volatility
has dramatically increased, but an overall direction has been lacking.
We've seen a pitched battle over the past couple of weeks as Chart
1 below depicts.
Chart 1: Bulls and bears fight for market direction
It's natural for such a battle between bulls and bears to take place
after an extended run. Those investors who were fortunate enough
to participate in the rally have a desire to take some gains at
the first sign of weakness, and to accelerate that profit-taking
each subsequent time the markets hit a bump in the road. Given that
such bumps have been few and far between, there should be no surprise
that the profit-taking has recently been more forceful. However,
the counterbalance to the profit-taking is always those investors
who missed the runup. They see the pause as an opportunity to finally
get in the market. The longer the market has gone without a dip
to buy, the more pronounced the enthusiasm for those investors to
step in.
Typically, the heavy institutional investors will win this battle.
We use volume to try and see their footprints. Though low volume
by itself does not mean much, a series of high volume days over
a short period of time informs us of institutional preference. Chart
2 shows us which side of the equation institutional investors have
been favoring lately.
Chart 2: Is this a repeat of November's pullback, or the
beginning of a larger correction?
Chart 2 shows a preponderance of higher-volume selling days over
the past month. Still, as we write this, the S&P 500
holds out hope
that it might attract buyers at its 50-day moving average (the solid
red trendline on Chart 2) and avoid a more serious correction.
We know that stocks have one or two corrections each year in a cyclical
bull market. But we also expect these pullbacks and corrections
to be resolved in favor of the cyclical trend. We expect this process
to continue until something breaks the trend. Some would argue that
$100+ dollar per barrel oil could be the catalyst that breaks this
market, as it helped achieve back in 2008. However, at that point,
housing was already in the doldrums with the mortgage mess having
brought down one large investment bank. No such situation exists
currently. Corporate profits are surging, economic indicators are
trending upward, and there is every reason to believe such a positive
trend will carry on for awhile longer. The Fed is still in the midst
of keeping interest rates lower - hardly the usual impetus for the
end of a cyclical bull period.
Of course, economic inputs do not influence our model - it's purely
mechanical. Thank goodness for that as economic forecasting records
are notoriously poor - ours would certainly be no better. We know
that recent weakness in copper and semiconductors combined with
the failure of most all emerging markets to join the rally - despite
a declining U.S. dollar - are all warning signs. We'll see if those
warnings are false alarms, as some of them were back in November.
Or whether they herald a more major change in trend. We know with
certainly this recent standoff between bulls and bears will end
at some point. With now TWO Models in our toolkit, we are poised
to take advantage and profit from whichever way this market breaks.
Question:
How do I make sure I'm set up to receive signal change e-mails?
With the introduction of our Turbo Model, some subcribers wonder
how they can make sure they receive the changes in signal, whether
they will receive changes in both Classic and Turbo Model signals,
and just how they can make sure they are properly set up for email
receipt of the signal changes. Here's a little tutorial to guide
you through the process of checking on and customizing how you receive
the signals.
- login to your TimingCube account
- go to the upper left part of the screen labeled "My Profile"
(This will bring up a full page of information you provided when
you signed up for your TimingCube account. You can change any of
the information on this page, saving it by clicking on the "Update"
button at the very bottom of the page.)
- scroll all the way down to the very bottom of the page to a section titled "Preferences - Model Settings"
- you will see a checkmark or dot in the current choices for your account
- here, you can customize which signals you receive emails for,
which signal pulls up first when you log in to your account, and
even what the e-mails of the signal changes will be titled. In the
example below, we've input a different title for each signal - you
can call it whatever you like! In the example, we've put red arrows
pointing to where you would make sure there is a checkmark to receive
the signal change email for each signal.
- finally, you MUST click on the "Update" button, which we've highlighted
on the example with a red box and arrows.
As always, if you have any questions about your account or any of
our services, our e-mail door is always open!
support@timingcube.com
Warm wishes and until next week.
The TimingCube Staff
|