TimingCube - The Trend Timing discipline - trend timing discipline,long-term trend,self-control,volatility,temporary losses

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Signal Update

Current Signal Performance as of

Signal Type	Trade Date	Index	Return since issued
		Nasdaq 100
		Russell 2000
		S&P 500
		QQQ

Cumulative Returns since First TimingCube Live Signal () as of

Index	Long Only	Long Only with Margin	Long & Short	Long & Short with Margin	Buy & Hold
Nasdaq 100
Russell 2000
S&P 500
QQQ

Note: QQQ returns are included for continuity sake.

Market Update

At its last meeting this week, the Fed warned that higher interest rates are on the way. This means that the wind has turned: instead of being at the market's back, pushing prices steadily higher for over a year, it is now clearly in the market's face and will make it much more difficult for prices to go up. In a healthy market, you would have expected a decent rebound following last week's punishing losses. It simply did not happen as investors instead sold into every rally attempt this week, sending markets lower. The Russell 2000 lost 2.01% on the week, while the S&P 500 shed 0.78%. As for the Nasdaq 100, it did better, finishing with a small 0.34% gain, but still closed the week below its 200-day simple moving average (SMA).

The week's action has confirmed the trend change and our Sell signal consequently remains active.

Trend Timing School

The Trend Timing discipline

Discipline is one of these funny words which, depending on context, can carry vastly different meanings. For instance, any subscriber not yet in harmony with the signal is probably asking for the punishment kind of discipline. Yes, if for some mysterious reason you still have not traded on last week's Sell signal, we strongly suggest you forgo this week's prose in favor of reading last week's plea and instructions for action in our Trend Timing School editorial entitled "Bravery in action". Staying on the wrong side of the market for any length of time can be dangerous to your financial health.

The rest of us are now entering the perfect phase for discipline of the regulation and control type. Trend Timing has very few hard rules but a signal is clearly to be interpreted as a very clear and definite order which we must obey without questioning. Long-term Trend Timers know that the period directly following a signal is the most challenging emotionally for various reasons:

Until the new trade is vindicated by achieving some gains, say 10% or more, human nature will endlessly question the signal at every opportunity
Our Model being largely a black-box makes it the first target of suspicion: "I could trust the Model more if I knew exactly why a trend change was detected". It turns out that the second-guessing mind game is no less intense when an individual investor makes her/his own decisions with all the details in hand
The fact that any dip from the point of entry places the trade return in negative territory tends to further exacerbate the suspect nature of the signal

It is in these trying times that we need to exert a lot of restraint and self-control to stay with the program. We are watchers and followers of mid-term trends (4 to 6 months outlook), and we cannot be distracted by every tick in the market or every bit of financial news. The volatility, including possible temporary losses, is the price one has to pay for the opportunity to achieve superior returns over time.

With an 80% winning trades ratio since inception (see the "FAQ of the Week" below for more statistics) the TimingCube system is by no means perfect, and every now and then we will experience a losing trade. The good news is that a Cash signal would be issued if the Nasdaq Composite suffered a 9% reversal from our entry point. Note that depending on the investment vehicle and strategy used your actual losses could be higher or lower and there is no hard limit on how much stock investments could fall in a single trading day. We understand this amount of volatility and potential losses are not everyone's cup of tea, in which case the stock market is not where your money should be. On the other hand if anyone knows of a stock market investment system that never experiences pullbacks and cranks out winning days after winning days, may we suggest you invest every last penny in it.

Trend Timers know better: such a system simply does not exist, and instead, we are glad to exhibit unwavering discipline by strictly adhering to the signals.
This brings us to the Trend Timing discipline as a branch of learning. Beyond the coaching and education you may get from this Web site from time to time, it is the personal journey we all take, the lessons we experience first hand along the way, the strictness and toughness gained from challenges overcome, and the deeper understanding of the markets and of ourselves, which are the real teachings of the Trend Timing discipline.

FAQ of the Week

Question: What are all the facts and figures about TimingCube's trade history?

We publish loads of data about all our signals, trades, performance and the like on our "Results" page, both for our live history and with 15 years of backtesting. Inevitably, we get asked for more statistics such as average trade duration, maximum drawdown, best single trade gain, etc.
We aim to please, and to prove it here are all the facts and figures you have asked for.

Date of first live TimingCube signal	June 18, 2001

Number of completed trades since January 18, 2001	10

Average Number of trades per year	3.5

Number of winning trades	8

Winning trades ratio	80%

Average signal duration	105 days

Shortest signal duration	3 days

Longest signal duration	393 days

	Nasdaq 100	Russell 2000	S&P 500
Cumulative gain, since June 18, 2001
Long & Short	241.98%	195.54%	111.59%
Long & Short with Margin	816.93%	593.55%	306.36%

Best gain on a single trade
For a Buy signal (Long)	34.06%	50.75%	26.30%
For a Sell signal (Short)	25.92%	26.55%	18.98%

Average gain on a single trade	13.92%	12.49%	8.01%
For a Buy signal (Long)	14.08%	15.68%	7.80%
For a Sell signal (Short)	13.76%	9.30%	8.22%

Worst loss on a single trade
For a Buy signal (Long)	-2.04%	-3.53%	-0.93%
For a Sell signal (Short)	-4.09%	-4.45%	-2.13%

Maximum drawdown on a single trade *
For a Buy signal (Long)	-8.26%	-6.90%	-3.74%
For a Sell signal (Short)	-14.07%	-10.42%	-11.63%
* With the institution of our 15% trailing stop Cash rule on March 12, 2004, we now would issue a Cash signal if the Nasdaq Composite Index reversed 15% from its most recent high (on an active Buy signal) or low (on an active Sell signal).