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

Market Update

As the rally continues, the Nasdaq Composite just completed its eighth consecutive weekly gain, a feat the index had not accomplished since 1999. Stocks retreated modestly on light trade Monday as some investors took money off the table on fears that a potential swine flu epidemic could further damage an already weak global economy. A similar pattern could be observed Tuesday, as the major indexes posted small declines in an overall quiet session that saw the Nasdaq Composite and S&P 500 shed 0.3%. Buyers returned to the market Wednesday to send stocks markedly higher on strong volume. Despite news that GDP contracted 6.1% during the first quarter, investors cheered the fact that inventories have plunged to very low levels, ensuring that any pickup in economic activity will stimulate production. The market was also helped by the Fed's decision to keep interest rates unchanged and its comment that "the pace of contraction appears to be somewhat slower". By day's end, the Nasdaq Composite had gained 2.3%. Stocks were on their way to further strong gains Thursday following several positive earnings reports, but the major indices reversed course late in the day to return to the unchanged mark. The last session of the week proved to be a choppy one, but stocks were able to tack on more gains, thanks largely to a strong showing by the energy sector. On the economic front, the ISM manufacturing index for April came in at 40.1, a number that was better than the 38.4 reading analysts were expecting.

The Nasdaq 100 (QQQQ) gained 2.02% on the week and managed to close above its 200-day exponential moving average (EMA) for the first time since August. As for the Russell 2000 (IWM) and S&P 500 (SPY), they posted respective weekly gains of 2.52% and 1.42%. Both ETFs remain located in-between their 50-day and 200-day EMAs.

For its part, our World portfolio posted a 1.31% gain this week. The portfolio consists of the 5 top-ranked world ETFs as of April 24, which marked the beginning of the current 4-week holding period.

Our current Buy signal remains in effect.

Trend Timing School

Serious Money
The very subject of money is very delicate and personal, sometimes even taboo. Many people do not want to discuss it. We fully support discretion and privacy aspects of money but for once, since we are amongst friends sharing similar wealth building ambitions, we will make an exception and address the age old question of "How much money should I invest in the stock market?" head-on.

Money being one of the two primary ingredients of the Trend Timing wealth building system (the other one being time itself), we feel it is an appropriate topic for this editorial. While how much money to invest is a highly personal question, and we recognize that not one size fits all, we always reply without hesitation "Substantially all your serious money".

We are not financial advisors but from experience we can clearly state that any meaningful wealth building system begins with the identification and long-term commitment of funds, what we call serious money.

• We have been taught that all money is serious, so what is serious money?
  Any money that you do not need to live or as working capital in the near term should be viewed as serious money that you set aside and put to work entirely for your wealth building system.
• When?
  The sooner the better.

You don't withdraw serious money to pay bills, or to buy this summer's vacation. You don't use serious money to speculate or gamble on risky, get rich quick schemes. Serious money is your long-term savings and retirement plan. What is long-term? For all practical purposes, it is the rest of your life.

Now that we have defined what serious money is, how prudent is it to recommend that all of it should be invested in the stock market according to the Trend Timing Model?
We have always been firm advocates of diversification, and we recognized the wisdom of asset and strategy diversification as good risk management disciplines in several of our editorials. Our stock portfolio will be diversified by definition because we advocate investing exclusively in market index instruments which represent broad baskets of companies and industries. If you are willing to add assets diversification to your investments, you may want to consider the ETFTide system which encompasses not only broad world equity markets but also ETFs investing in specific industry segments as well as non-stock asset classes such as bonds, commodities, currencies and real estate.

Because a Buy and Hold approach to investing guarantees riding every correction and bear market to the bottom, conventional wisdom has complemented this strategy with portfolio diversification to limit exposure to such stock market declines. As such, you would allocate only a fraction of your serious money to equities, and the balance would be placed in non-correlated investments or income producing instruments. We have always rejected such performance crippling wisdom. In fact, the most prominent difference between Buy and Hold and Trend Timing is precisely the "all-weather" characteristic of staying on the right side of the market and therefore benefiting from both rising and declining markets. This is why we are eager to put ALL of our serious money to work in the stock market ALL of the time. The more the better. The only exception would be when a Cash signal is active, as was the case between September of last year and early April.

We appreciate the level of confidence, trust, and courage involved in the decision to commit serious money to an investment system. It does not have to be Trend Timing. As long as you select a time proven, all-weather investment method that meets your risk/reward tolerance, and that you can emotionally stick with for the long term, we know that you will be better off than if you hesitate on the sidelines. Money left sitting in cash or money market funds is not bearing any fruits, and is in fact steadily losing value due to inflation. Even if you decide to test the waters by committing only a fraction of your serious money, the consequence is watered down results.

We urge the uncommitted and partially committed to learn to trust a system soon because one thing is for certain, without a system and without long term consistency there can be no meaningful wealth building.

FAQ of the Week

Question: How can I spot the strongest U.S. markets?

We know the World ETF Ranking as our guide to the strongest world geographies, but we often forget that it also serves to rate the various segments of the U.S. market. Of the 31 ETFs we rank, 7 are U.S.-based and they reflect the strength of the type of stocks in their respective index. For the portion of your assets you dedicate to the U.S. market, if any, past history favors the ETFs ranked the highest.

Currently the ranking shows that QQQQ is the strongest U.S.-based ETF, reflecting the outperformance of large-cap technology stocks in the recent months.

Warm wishes and until next week.

The TimingCube Staff