TimingCube - Hanging loose - patient,disciplined,peace of mind,wealth building,blend of strategies

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

Major averages were little changed on the week. The Nasdaq 100 and Russell 2000 respectively lost 0.76% and 0.09%, while the S&P 500 finished the week with a 0.16% gain. Friday's action was especially interesting: despite a batch of good news, namely lower oil prices, a better-than-expected mid-quarter update from Intel and a strong employment report, markets only managed to recover a portion of the previous day's losses and did so on very light volume. Once again, this shows a clear lack of commitment from buyers, as you would have expected volume to expand, not to shrink, on such positive news. As we have stated before, markets simply cannot move higher for long without increasing volume.

The week's action did not affect our Model and our current Sell signal consequently remains active.

Trend Timing School

Hanging loose

For many new subscribers that read through the back issues of Trend Timing School and some of us long timers who actually remember reading them, it seems like the demands can be high: we have to be ready, brave, disciplined and patient, amongst other qualities. Do this, do that. Well, some of us cannot do it all, right away, perfectly, or all the time. Sometimes we are confused, mistaken, weak, or just too busy. It would be easy to forget that the investor's well-being and peace of mind have always been primary goals of the Trend Timing system, but we know that without them no durable and sustainable wealth building program can exist.

Even if doing well at following the Model precisely, many worry way too much about it. Sometimes we doubt or question a signal, we second-guess, we rationalize, and we suspect the worst is going to happen. A lot of energy is being sapped by waging this internal battle. The fact is that no amount of anxiety is going to affect what markets do next or how well our current trade will ultimately do. The only way fears can have an impact is if you give in to them and cut the trade short by liquidating your current position. In doing so you forfeit the opportunity to fully participate in the program and you end-up on the wrong side of the market, worrying some more about when to rejoin the party.

We generally are too hard on ourselves and as we contemplate failure we build barriers to trying again. It is better to forgive ourselves and learn from the mistake than to abandon. The Trend Timing system is actually pretty easy and simple if you take it one step at a time and stop punishing yourself. Yes, there are several concepts to understand, a few decisions to make, and actions to take. Here are the principal ones:

Decisions

How much money to invest? If it is not at a brokerage where you can trade, move it
Which strategy - or blend of strategies - to implement
What to trade, which indices to invest in, what investment vehicles to use (ETFs and/or mutual funds)

Actions

Place the trade orders after receiving a signal or, for new subscribers, dollar-cost-average into the current position (Sell) over the next few weeks
Monitor progress once a week

Let's do the math: a few hours up front to read, understand the system, and get organized. Add perhaps one hour per week to read the exciting new issue of the Weekly Update and monitor our investment progress, and an hour to place our trades every time we get a signal (which is on average three times per year). Everything else after these few steps is self-inflicted. All the worrying, all the pain, all the self-incrimination or the blame. Don't beat yourself up, or your friends and relatives.

It is OK to stumble or fall off the wagon, to doubt, to be spooked into bailing out or afraid to commit. Just pick yourself up and try again, smarter and stronger than before. Even for recent subscribers, now is always the best time to hop on. If it is mid-signal the safest way to re-enter is by using the dollar-cost-averaging method, be sure to read

Most importantly, as Trend Timers we have our investment house in order, and at all times we know exactly what to do. We can relax, take it easy, chill-out, or as they say in Hawaii, "hang loose". Whether it is on a Pacific beach, on a golf course, advancing your career, spending more time with the grand-children, Trend Timing uniquely gives you many hours of your life back, and loads of peace of mind. Hang loose is a good expression to describe the very specialized Trend Timing investment attitude we apply in order to enjoy our investments for the long run, achieve our financial objectives, and ultimately better quality of life.

FAQ of the Week

Question: What happens to the Model when markets lack volatility or trending?

For starters, anyone who looks at the 6-month history of any of the major market indices (we show the Nasdaq Composite in the chart below but they all look more or less the same) can readily spot the pronounced downtrend in place since January 2004. This now predominant trend is in no way changed by the range-bound action of the last month. At the market close today, the Nasdaq Composite is within 1.5% of where it was at the close a month ago on May 4th. Our Model is not affected by a trendless market as no trend change is detected until the sideways motion breaks one way or the other. Since we are still in a predominant downtrend we know that the most probable next move is down. If it happens to be up, the Model will issue a Buy signal in due course.

In the mean time, while the market is not going anywhere, nobody makes any money except maybe the brokers collecting fees from the many in the crowd who get talked or scared into buying and selling erratically. Some say that volatile range-bound markets are ideal times for traders. Yes, high volatility can be beneficial, especially when coupled with a trend. Without a trend we are left with just trading for the sake of trading. The fact is that very few people, even professionals, can consistently make money with frequent trading and the few that do cannot sustain the incredible time and stress constraints for very long.

For us Trend Timers the best course of action is to sit tight and wait for the trend to resume, because we know from history that trendless markets are never prolonged.

Warm wishes and until next week.

The TimingCube Staff