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

Market Update

Reacting to wild swings in oil prices, stocks moved back and forth all week but lost ground overall. Markets started the week on a positive note, as a pullback in the price of crude helped the Nasdaq Composite to a 0.8% gain. Plagued with renewed concerns over the state of the financial sector, the main indexes moved lower Tuesday and did so again Wednesday following a weak earnings report from FedEx and rising oil prices. China announced Thursday its decision to boost domestic gas prices by as much as 18%, causing the price of crude to retreat by $4.75 per barrel. Stocks rallied on the news, with the Nasdaq 100 jumping 1.6% as tech stocks once again outperformed. The gains proved fleeting, however, as stocks retreated sharply Friday. Moody's put pressure on the financial sector by cutting its rating for bond issuers MBIA and Ambac. With oil prices once again on the rise due to increased tensions between Israel and Iran, the negative tone resulted in a loss of 1.85% for the S&P 500 Friday.

For the week, the Nasdaq 100, Russell 2000 and S&P 500 respectively lost 1.90%, 1.07% and 3.10%. The Nasdaq 100 has dropped below its 50-day exponential moving average (EMA) but remains above its 200-day EMA, while the Russell 2000 and the S&P 500 are located below both EMAs.

For its part, our World Index Ranking portfolio posted a 1.89% loss this week. The portfolio consists of the 5 top-ranked world indexes as of May 23, which marked the beginning of the current 4-week holding period. The World Index Ranking portfolio is being rebalanced today, as the current 4-week holding period is now over.

Our current Buy signal remains in effect.

Trend Timing School

TimingCube makeover

As we hinted at over the past several weeks, we are this weekend upgrading to a new and improved TimingCube web site. We have listened to your constructive suggestions, and while we could not possibly accommodate all demands, we believe this goes a long way in making the service more effective and at the same time reach back to our origins of simplicity and ease of use. We apologize in advance for any inconvenience this upgrade may cause, and we will do our utmost to keep any disruptions to a minimum. We trust the result will be worth the wait.

Before highlighting the most noteworthy enhancements, let's review the schedule of events.

Web site upgrade schedule.
In order to have a clean phase-over from the current web site to the new one we will proceed in two steps. On Friday June 20, 2008, we normally close-out the current week and the current rebalancing period for our World Index Ranking strategy. We still run the same web site but we announce the new site and describe the most important improvements in this Weekly Update. The World Index Ranking table is left blank, as the next ranking will be run with the new expanded ETF list. Sometime over the weekend we switch to the new version of the Web site, at which time the World ETF Ranking is published for the new 4-week rebalancing period.

Switch from World indexes to World ETFs.
As we have come to use the word index and its ETF interchangeably, the importance of this shift may not be apparent at first. Yet, it is as if moving from a "market-centric" view to an "investor-centric" one. To put it more clearly, as Trend Timers we mostly invest in ETFs, not indexes, and therefore the World Index Ranking will now be the World ETF Ranking, it shall be driven by the relative strength of the ETFs, and the results we track and publish will reflect the performance of the ETFs themselves, not the hypothetical returns of indexes. Now that the ETFs we have been recommending (and a few more...) have accumulated sufficient historical data for our proprietary algorithm, there is no longer a reason to base the rankings on the indexes. In fact, a focus on ETFs benefits us in more than one way. For starters, it entirely eliminates the issue of having to reconcile a country ETF tracking a different and inexact index proxy, and removes any tracking inaccuracies. It let's us account for the dividends and capital gains distributions which indexes ignore. Most importantly when dealing with International funds, unlike indexes which strictly measure the performance of the stock markets represented by their components, ETF price movements reflect not only the market strength but also the relative strength of the currency with respect to the U.S. dollar.

Expanded list of geographic markets and ETFs.
Besides converting the entire rankings list from indexes to ETFs we are expanding the list with 5 new markets/ETFs (4 International, 1 USA), for a total of 32 ETFs. The new additions are:

EWN Netherlands
EZA South Africa
FXI China
IWC USA/Micro Caps
RSX Russia

Improved Results page.
Besides the aforementioned switch to ETFs throughout, the most visible change is that all the results are now consistent across all strategies. Whether you strictly invest in the U.S. with the Long and Short strategy using the ETFs we have long targeted and monitored (the Nasdaq 100 QQQQ, the Russell 2000 IWM, and the S&P 500 SPY ) or with the World Long and Short strategy which invests in the Top 5 ETFs during Buy signals, you will be able to find the respective results side-by-side. A new addition to our results reporting is the Equity Curve which charts the growth of a $10,000 investment following various strategies. Another beneficial view in the "Signal Returns" section is the inclusion of the World strategy, signal-by-signal returns which were previously not available. One sacrifice we have made for the sake of simplicity and space constraints is to get rid of all leveraged results, which were really somewhat redundant and misleading in the first place. With that one exception, all our past results remain intact and unchanged, including our Trades History. In case you still would like to check results with indexes or other funds and stocks, the "Performance with individual security" tool which let's you select the ticker of your choice is still there for you to use.

Revised Home page.
As current subscribers most of us go straight to the Log in page and pay no attention to the TimingCube "Home" page. Besides a new layout and graphs, one item worth mentioning is a new "Ranked #1 by TimerTrac.com" button. We normally try to be reserved with our returns, but since this is independently generated data, we might as well share it. Our preferred strategy, the World Long and Short, has been ranked #1 over one year by TimerTrac when compared to the hundreds of diversified, non-leveraged timing strategies they monitor. The 1-year return they post is 29.10% as compared to a loss of -6.66% for the S&P 500 index .Click below for details:

Extensive web site streamlining and rewrite.
While long term subscribers have lived through our evolution and are quite familiar with the site and its resources, many of the changes and additions we implemented over the years had caused the site to balloon in size and complexity, perplexing visitors and new members. We took this opportunity to restructure and streamline the site back to a more intuitive and user friendly state. The contents have been made simpler and more consistent. Rather than describe enhancements individually we would recommend to anyone interested in a short refresher about our service and strategies to read the "Our Service" page which explains succinctly everything there is to know.

We hope you enjoy your new TimingCube web site!

FAQ of the Week

Question: What is the difference between geographic and asset diversification?

In our article on "Diversification" last week we covered many different terms and concepts, and we may have skipped some explanation of how the TimingCube service differs from asset diversification. The main element to remember is that the TimingCube system deals exclusively with investing in the broad stock market, and to do so according to the major trends in this broad market. Stocks are one asset class. We also know that when viewed over the mid-term most world stock markets are well correlated and move in the same general direction, which is captured by our Model's Buy/Sell/Cash signals. We can forego geographic diversification and implement this Long/Short strategy by investing in the U.S. stock markets through the major index ETFs we follow such as QQQQ (Nasdaq 100), IWM (Russell 2000) and SPY (S&P 500). But since we also know that world markets exhibit varying levels of strength over time, the World ETF Ranking lets us target the strongest ones. Note that focusing on the 5 strongest markets is the goal, not geographic diversification per se. There could be times when the U.S. markets have momentum on their side, and we could have 5 U.S. ETFs in the Top 5.

To get back to the original question, TimingCube is all about the stock market and as such it offers no asset diversification. It uses trends and the corresponding Buy and Sell signals to deal with stock market bulls and bears. Our sister publication ETFTide covers the spectrum of ETFs, including those tracking broad stock markets, geographies, industry sectors, as well as other asset classes such as commodities, currencies, precious metals, bonds or real estate. They have no signals and focus on the strongest ETFs and asset classes, not diversification.

Warm wishes and until next week.

The TimingCube Staff