Signal Type	Trade Date	Return since issued
		World	U.S.
			Nasdaq 100 (QQQQ) Russell 2000 (IWM) S&P 500 (SPY)

Market Update

Stocks continued their climb this week as the current rally shows no sign of abating, sending the S&P 500 to its highest weekly close since September 2008. After a quiet first session that left the major indexes little changed Monday, stocks were able to add to their recent gains Tuesday despite a bout of late selling, with the Nasdaq Composite finishing 0.4% higher. Buoyed by semiconductor and biotech stocks, the index added another 0.8% during the next session. Equities were also lifted by positive economic news, as a decline in inventory levels pointed to renewed demand while data from wholesalers showed an increase in sales for the tenth consecutive month. Stocks then faced early pressure Thursday and remained in the red for most of the session, but a last-hour rally allowed the S&P 500 and Nasdaq Composite to turn around and gain another 0.4%. This clearly shows that market participants are reluctant to sell and instead take advantage of price dips to add to their positions. An unexpected increase in February retail sales was counterbalanced by a disappointing reading on consumer confidence Friday. The mixed news left stocks directionless, resulting in a flat market by day's end. Yet, it was another strong week for equities, as illustrated by the fact that the Nasdaq 100 has now risen for thirteen consecutive sessions.

The Nasdaq 100 (QQQQ), Russell 2000 (IWM) and S&P 500 (SPY) respectively gained 1.98%, 1.65% and 1.06% over the five-day span. All three ETFs remain located above both their 50-day and 200-day exponential moving averages (EMAs).

For its part, our World portfolio posted a 0.89% gain this week. The portfolio consists of the 5 top-ranked world ETFs as of February 26, which marked the beginning of the current 4-week holding period.

Our current Buy signal remains in effect.

Trend Timing School

Turbo-charge your signal gains.

Our trend-following investment philosophy consists of two major tenets:

1. Minimize losses
2. Maximize gains

Sounds silly, of course. Everyone wants to minimize losses and maximize gains. Value investors attempt to accomplish this by purchasing fundamentally attractive stocks at hopefully low prices and selling them when their presumed "full" value is reached. We find it far easier to achieve our objectives by focusing on broader market and sector trends rather than combing through the market for specific stocks that may or may not someday attract investor attention. By looking at trends, we are already sifting the market down to the areas that are gaining investor enthusiasm; we don't have to wonder what will cause investors to come aboard our ship. We go with the market's flow.

We attack the first tenet - minimize losses - by adhering to our tried and true market signal. The Buy, Sell, or Cash signal that our model generates. This signal prevents us from the most damaging of investment mistakes - suffering through bear markets where our hard-earned capital can be fairly quickly cut in half. Even if our signal is wrong, we have hard-coded stop losses to limit the damage. We MUST minimize losses in order to live to play another day; in order to build our wealth rather than spin our wheels recouping prior losses.

With a fresh Buy signal, it's appropriate to focus on the second tenet - how to maximize our gains. Our core TimingCube strategy suggests that investors can spread their money across the three major U.S. indexes - the Nasdaq 100, Russell 200 and S&P 500. By doing so, you are getting a huge amount of diversification and effectively riding the market's wave.

However, you can do better. Our World Index Rankings offer a simple way to outperform the basic indexes. We recommend investing in the top 5 ETFs on the list as we have found this approach provides the best returns. However, some investors will be more comfortable spreading their investment across 10 or more of the top-ranked choices to get a little less volatility.

Another way to maximize gains is to look at the recommendations of our sister publication, ETFTide. The Tide takes a broader view of the market going beyond country ETFs and broad indexes to include sectors, currencies, and bond ETFs. Charts 1 and 2 display the power of recent ETFTide recommendations. The Steel ETF shown in Chart 1 has routinely shot up by 100+ percentage points during its uptrends. While the Retail ETF in Chart 2 exhibits more modest gains, it also far surpasses the gains of the broader market. With markets now quickly returning to a normal state, ETFTide offers an easy way to find superior gains during market uptrends.

Chart 1: Recent SLX Trend



Chart 2: Recent XRT Trend



Finally, we return to a prior weekly update for an idea to improve returns - equally-weighted ETFs. These vehicles leverage the power of mid- and small-cap stocks to outperform the broader indexes. Chart 3 shows how an investor can combine a basic sector rotation approach with equal-weighted ETFs for strong gains. The basic sector rotation guide leads investors to consumer discretionary stocks in the earlier phases of a market and economic recovery. The chart displays the substantial gains offered by equal-weight when compared to both the market as well as to the more traditionally weighted ETF, in this case the consumer discretionary "spider" ETF.

Chart 3: Gains offered by equal-weight



With a new Buy signal, our main step is to take action and return our funds to the market. Our second consideration is how we can best profit from the signal. Investors have a wide variety of risk tolerances and objectives. We hope the ideas offered above give you a good palette of choices from which to build a portfolio that maximizes your gains. You can rest assured that our market signal will take care of the first tenet!

FAQ of the Week

Question: How do I get access to your ETFTide recommendations?

The ETFTide service outperformed the broad market by 3x during the last cyclical bull market, while losing only half as much during the market crash. We believe this performance compares quite favorably to almost any mutual fund or other investment approach and makes ETFTide an ideal complement to TimingCube as the two services focus on different strategies that provide for good overall diversification. ETFTide underperformed in 2009 as it was slow to adjust to the dramatic rebound in the market. But we view that underperformance as a rare event and expect the typical outperformance to resume in 2010. The ETFTide website, http:/www.etftide.com, can provide all the information you need to get started.

Warm wishes and until next week.

The TimingCube Staff