TimingCube - ONEQ and QQQ - oneq,ETFs,qqq,nasdaq 100,nasdaq composite index

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Unveiling new site content and enhancements!

You can review the list of additions in the FAQ of the Week below.

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

This week started much the same way as last week ended: down.
The first salvo came from Merrill Lynch downgrading the semiconductor sector. On Tuesday Wall Street was cheering a 4.5% reduction in the U.S. trade deficit for May (after five consecutive all-time highs!), but in the end even bulls realized this was akin to a gambler losing only $9,560 compared to last month's $10,000 deficit.
Intel's much anticipated earnings release - while meeting expectations - was another downer because of a sharp increase in inventories and a forecast of lower margins.
By the end of the week even blue chip stocks started to falter with weakness in the Financials and Retail sectors.

With lower highs and now lower lows, the technology rally that started mid-May is now officially dead, and the rest of the market is on life support. For the week all indices ended lower with the Nasdaq 100 dropping 3.32%, the Russell 2000 1.46% and the S&P 500 1.03%.

Our active Sell signal benefits from the current market environment.

Trend Timing School

ONEQ and QQQ

QQQ has long been our primary work horse for historical reasons, but there is a new kid on the block that may be worth looking at: ONEQ.
Since our Model takes most of its cues from the Nasdaq Composite Index (as the proxy for the market at large), many are wondering if it could not be a better choice than QQQ. Let's look at the facts before we draw any hard conclusions.

Investors have started noticing the rapid progress made by ONEQ since its introduction last year, much quicker than QQQ in its infancy. The short description of Fidelity's ONEQ ETF is that it tracks the entire Nasdaq Composite Index - not the Nasdaq 100. This has potential benefits, but as we discussed in our July 2, 2004 TTS editorial, while ETFs are perfect investment vehicles for our Trend Timing Model, they are not all created equal.

We present the detailed information in the table below for your own comparison. Our current analysis of the situation is as follows.

Positives
Being a mirror image of the Nasdaq Composite Index - our Model's primary guide - makes ONEQ the investment vehicle that is possibly the best correlated with our signals.
So far, the short 10-month history bears this out. As the index it tracks, ONEQ is much less concentrated in the technology sector than QQQ. Depending on your perspective this can be good or bad. It usually should translate in lower volatility than its counterpart. Their relative performance will vary in function of cyclical sector rotation, with QQQ outperforming when technology is hot, and ONEQ leading when it is not.
Because it is more balanced by definition, ONEQ has the potential to being the best choice over time for the typical investor.

Negatives
The initial but temporary disadvantage is that it is an infant, tiny in comparison to the QQQ behemoth. This in turn leads to the principal weakness: low liquidity.
The daily volume tells the story. With an average of 120,000 ONEQ shares traded daily, it is three orders of magnitude less traded than QQQ. To be fair, liquidity is as much a function of the liquidity of the underlying shares as it is the ETF's daily volume, but its scarcity should still act as a red flag, especially when shorting it.

ONEQ's future looks bright, but only time will tell.

	ONEQ	QQQ
Name	Fidelity Nasdaq Composite Index Tracking Stock	Nasdaq 100 Index Tracking Stock
Stock exchange	Nasdaq	Amex
Date started	October 1, 2003	March 10, 1999
Index	Nasdaq Composite Index	Nasdaq 100
Assets (Market Cap)	$122M	$22B
Shares outstanding	1.6M	636M
Expense ratio	0.30%	0.20%
Average daily volume	120,000	103,814,746
Top 5 industry segments	Computer - 52.14% Health Care - 13.55% Financials - 11.03% Consumer Discr. - 8.51% Industrials - 5.46%	Computer & Office - 30.81% Computer Soft/Srvcs - 25.64% Telecommunications - 13.41% Retail/Wholesale - 9.99% Biotechnology - 9.51%
Top 5 holdings	Microsoft Corp - 9.01% Intel Corp - 5.90% Cisco Systems Inc - 5.41% Dell Inc - 2.88% Amgen Inc - 2.5%	Microsoft Corp - 7.98% Qualcomm Inc - 5.55% Intel Corp - 5.31% Cisco Systems Inc - 4.97% Amgen Inc - 2.99%

For a current and complete list of the companies in the ONEQ,
go to the List of companies in the Nasdaq Composite Index.

For a current and complete list of the companies in the QQQ,
go to the List of companies in the Nasdaq 100 Index.

FAQ of the Week

Question: What are the new site improvements?

The new additions fall largely in two distinct categories: Content and Ease of use.

New Content

Glossary - With the abundance of specialized Trend Timing, investing terms and expressions used throughout the site we decided time had come to offer definitions and group them all in one place

What to Trade? - Earlier versions of this existed in the "Strategy" page but we decided to make it a page on its own merit under the new "Resources" grouping (see below). As before it lists ETFs and mutual funds suitable for our investment system and spells out how to implement the strategies

In the News additions - Two recent press articles have been listed on the "In the News" page

Ease of use
With the constant expansion of our site it became imperative to enhance navigation tools and assistance in finding specific content. The following functionality should help with these tasks.

Resources - This new reference page places a wealth of detailed information at your fingertips, including:

What to Trade? See above

Trend Timing School Index A topical index to all past articles

FAQ of the Week Index A topical index to all past questions

Glossary See above

Navigation bar/footer - You now can navigate to any page from the links in the footer of every page without the need to scroll back up to the navigation tabs

Site Map - An easy way to find where everything is located on the Web site