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

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

Market Update

Despite a challenging start to the holiday-shortened week, the major indices managed to move higher over the 4-day span. The ability of the Nasdaq Composite to stabilize and rebound in the last week of May caused our Model to issue a Buy signal after the close on Wednesday. Because the new Buy signal came so soon after the previous Sell, a few subscribers wrote us to ask if it was the result of a judgment call on our part. It is absolutely not. As has been the case for all previous signals, this latest Buy was issued by the same 100% mechanical and unemotional Model we have used all along and there has been no change whatsoever. Our Model could not care less about what our opinion on the market is. It just flashed a Buy signal so we acted on it without trying to second-guess. The day after the signal was issued, markets confirmed their rebound as the Nasdaq Composite jumped almost 2%, its best showing since mid-April. On the economic front, the May employment report released Friday should help alleviate recurring inflation concerns, as payrolls grew less than anticipated and hourly earnings were only up 0.1% versus the 0.3% that economists expected.

The Nasdaq 100 rebounded 0.41% on the week. It has moved closer to its 200-day exponential moving average (EMA) but is still below it and its 50-day EMA. The Russell 2000 and S&P 500 did better, respectively gaining 1.08% and 0.63%. Both indices remain above their long-term 200-day EMA and have moved back up to close just below their 50-day EMA. We now have a Buy signal in effect.

Trend Timing School

Annual broker review

We have only reviewed and compared brokers once before (see Selecting the right brokerage house) almost two years ago. Since then the brokerage landscape has evolved quite rapidly and we feel that as long as the industry is undergoing substantial changes we should provide more frequent updates, thus this first issue of the Annual broker review.

This is by no means an exhaustive review of all brokerage choices available, but a rather narrow look at those brokers with the characteristics we are looking for as Trend Timers. Since our subscribers know what and when to buy and sell, we are primarily looking at price and the availability of the investment vehicles we focus on as key parameters. We did not evaluate characteristics such as ease of use, functionality or customer service. We have intentionally left out so-called full-service brokers such as Merrill Lynch, Morgan Stanley or Smith Barney, but our wealthier subscribers may well be served better by the broad array of investment and banking services and the personal attention such firms provide (although we assume that it takes a pretty healthy account balance to get your friendly broker to come spend some quality one-on-one time with you on the beach, as they do in Morgan Stanley commercials ).

What has been happening in the brokerage industry is ferocious competition and consolidation. The direct result is that brokers generally offer better features and services than ever before at lower prices. The differences which used to exist between bare-bones online brokers and the so-called premium discount brokers like E*Trade and Fidelity have mostly disappeared. Many of the online brokers have significantly revamped their Web sites, added options trading and other previously missing tools and services. The ongoing fight for market share, increased revenue and profitability is pointing to more mergers and acquisitions as the way to boost the economies of scale needed to compete in this cut-throat environment, and companies such as HarrisDirect and Scottrade should be good targets for the big boys. Ameritrade and TD Waterhouse have become TD Ameritrade. E*Trade, already the product of more than a dozen mergers, has gobbled up BrownCo (Note that the lower fees BrownCo used to offer their clients are still honored by E*Trade for the time being, with no word on if or when this might change). For now, the winner of all this competitive activity is clearly the investor, with more services at lower prices.

The table below offers an updated comparison between the key players. All data were collected directly from the respective broker Web sites on May 31, 2006 and is believed to be accurate, but is not guaranteed. Keep in mind that brokerage houses offer many different types of accounts and the actual terms and conditions can vary widely depending on location, account type, total account value and/or activity level. From time to time they also have special promotional offers which reduce or waive certain commissions or fees. We wanted our review to reflect the terms and prices anybody can receive at any time, and not the best deal you could get if you were an active trader or had a million dollar in your account (yes, not surprisingly, the million dollar client gets a sweeter deal than the rest of us). For comparison sake we have also included ProFunds which, while not really a broker, present a viable alternative for investors content to invest in bull/bear mutual funds. For more on this topic also read Brokerage accounts versus ProFunds or Rydex accounts.

For the most part the differences between brokers have narrowed over the last couple of years. Fees have generally come down and many previously hidden charges such as infamous "order handling fees" from the likes of Charles Schwab have been eliminated. Keep in mind that the services provided at these prices are bare-bones. While full-service brokers will generally bundle a lot of services such as research, tools and broker assistance, the discount outfits will frequently nickel and dime you for everything from paper monthly statements to trade confirmations.

When it comes to trading our preferred bull/bear index mutual funds such as the ProFunds and Rydex families, there are still surprising variations in prices between brokers. As conceived by their originators, these types of mutual funds were intended as no-load, no-transaction fee and no short-term redemption fees. By now, most brokers have at least gotten these funds classified correctly as no-transaction fee (NTF) funds and accordingly do not charge transaction fees. TD Ameritrade is by far the most confusing and misleading in this regard. While their site clearly lists ProFunds and Rydex families as NTF, many of their clients still pay commissions. In fact many are paying increased commissions as TD Ameritrade informed their customers that as of May 27^th they will change their fee structure for these funds from $17.99 per trade to $49.99 for Investor class shares. Yes, they plan to offer a no-transaction fee group of funds which includes the ProFunds Service class shares which charge a 12b-1 fee of 1% but, in our humble opinion, no one should have to pay such loads for mutual funds. Further, if you were grand-fathered in as a TD Waterhouse customer, you may still be paying a $30 commission, but if you have a TD Ameritrade Apex account the fees are waived. Are you confused yet?

The other big issue with most brokers is that they still impose so-called STR (Short Term Redemption) fees if the funds are held less than 90 or 180 days which, as we have just witnessed, could well happen with the TimingCube signals. The lone exception in our review is Scottrade which waives STR fees for the Direxion, Profunds and Rydex families.

Regardless of which broker you use today, the pace of changes in the industry is such that it is well worth your time to review your situation from time to time. Also, if you are dealing with a broker going through an acquisition, you should make sure you understand how your fees and services will be affected.

	Charles Schwab	E*Trade	Fidelity	Scottrade	TD Ameritrade	ProFunds
URL	schwab.com	etrade.com	fidelity.com	scottrade.com	ameritrade.com	profunds.com
Minimum initial amount to open an account
Non-IRA	$2,500	$1,000	$2,500	$500	$2,000	$15,000
Margin	$2,500	$2,000	$2,500	$2,000	$2,000	NA
IRA	$2,000	None	$2,500	$500	$1,000	$15,000
Commissions for trading equities (online, market orders)
Fees	$19.95	$12.99	$19.95	$7	$9.99	NA
Up to	$1,000 shares	$2,000 shares	$1,000 shares	Unlimited	Unlimited	NA
Commissions for trading equities (broker-assisted, market orders)
Fees	$54.95 minimum	$45 + commission	$55	$27	$44.99	NA
Up to	$2,499	$2,000 shares	100 shares	Unlimited	Unlimited	NA
Commissions for trading no load mutual funds (online)
Fees	$0	$0	$0	$0	$49.99	$0
Commissions for trading no load mutual funds (broker-assisted)
Fees	$25 minimum	$45 + commission	$100 - $250	$20	?	$0
Short term  redemption fees  (mutual funds)	90 days or less $74.95	90 days or less $49.99	180 days or less $75	180 days or less $17 (Except ProFunds, Rydex, Direxion)	90 days or less 0.60% ($39 to $199)	None
Commissions for trading options (online)
Fees	$9.95 + $1.40 per contract	$12.99 + $1.25 per contract	$19.95 + $0.75 per contract	$7.00 + $1.25 per contract	$9.99 + $0.75 per contract	NA
Extras
Margin rates	10.50%	9.99%	10.825%	10.25%	10.75%	NA
Account  maintenance  fees	None	$40/QTR if<$10,000 in account	None	None	None	NA
Local offices	Yes	Few	Yes	Yes	Few	NA

FAQ of the Week

Question: Are there oil and energy investments to use with the signal?

After reading last week's Trend Timing School article entitled "Over a barrel", many subscribers came away convinced that oil and the energy sector in general are in for a long-term bull market that they would like to capitalize on. Before going any further we must point out one more time that the TimingCube Model deals with the broad market trend and that individual industry sectors are not well correlated with either the broad market or our signals. So if you chose to invest in these notoriously volatile markets, we wish you all the best but know that you are on your own to determine when it is time to buy and sell.

Here are a few energy related ETFs (not correlated with the TimingCube Signal!):

• Energy Select Sector SPDR (XLE)
• iShares Dow Jones U.S. Energy (IYE)
• Vanguard Energy VIPERs (VDE)

Warm wishes and until next week.

The TimingCube Staff