Managed Accounts Survey results

We would like to take this opportunity to thank all of you for the tremendous participation and interest in our recent Managed Accounts Survey. The overall response has been phenomenal and as a result, we are now finalizing plans to bring you this much needed service.

As TimingCube subscribers you can also rest assured that this new service will in no way affect or change the current TimingCube service, model or signal. Managed accounts will strictly be a complementary offering, based on the exact same signal, for people that cannot or prefer not to do the trading themselves or require advisory services.

Watch this space in the coming weeks for more details.

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 After falling steadily since July 1st, markets finally rebounded this week to post sizable gains. There was no particular catalyst for the news, but markets had become oversold and were due for a bounce. Of course it remains to be seen whether the rally has lasting power or if the downtrend we have experienced for most of the year quickly resumes, as all major indices remain below their respective 200-day simple moving averages (SMA). For the week, the Nasdaq 100 and Russell 2000 posted gains of 4.50% and 5.90%, respectively. As for the S&P 500, it finished 3.15% higher. Even though market action improved this week, our Model has not detected a trend reversal. Our current Sell signal consequently remains active. Trend Timing School Trends and catastrophic events History is littered with catastrophic events, natural or man-made, but also with the failures and missed opportunities of people too frightened about the future to live their lives to the fullest. As investors it is not unusual to try to imagine a range of possible scenarios, most of them bad, and try to anticipate their impact on the markets and our holdings. Catastrophobia (don't bother looking it up in the dictionary, we just thought it sounded cute) is a somewhat cyclical obsession. Lately, there has been a conspicuous increase in the number of intelligence reports, government warnings, and news stories predicting imminent catastrophic events, threats of major terrorist attacks in the U.S., and the corollary increases in disaster-related subscriber questions. Conspiracy theorists routinely claim that the government warnings and the ensuing media hype is orchestrated to keep the masses busy worrying about some external threat instead of their own day to day realities. Cynics assert that the reason for the catastrophe hype is that fear sells, that the news media are all over it to boost ratings, and that advertisers exploit it to sell you everything from financial newsletters, insurance, gold coins and guns. And yes, with this editorial we are to some extent guilty of worsening the fear monger statistics. But we mean well! Regardless of why this is currently a hot topic, the only certainty is that sooner or later the next tragedy will hit. Whether it is an earth quake, an epidemic, a political assassination, or the much predicted terror strike, we know it will be horrific. Markets have a long history of dealing with crisis of all sorts, and typically they respond extremely well. So what is the impact on our investments likely to be? Study of past incidents shows that most events trigger an immediate irrational market response, typically a panic sell-off. Then, over surprisingly short periods, investors realize that they and the rest of the world will survive and overcome the devastation, and the markets recover to resume the predominant trend that existed before the event took place. Let us review a couple of examples. Probably not too many subscribers can remember that far back, but the early sixties were as tense a period as the world had seen in almost twenty years. In 1963, the United States had just recently seen the end of the Cuban missile crisis when the U.S. involvement in the war in South-East Asia started to seriously heat-up due in large part to the coup in South Vietnam. On November 22, 1963 the assassination of President John F. Kennedy sent shock waves throughout the world and the stock market plunging. However, as devastating and far reaching as the tragedy was, by the end of the year the markets had recovered all of their losses, and were up over 20% a year later. Still fresh in everyone's memories, the unprecedented terrorist strikes of September 11, 2001 had a massive impact in terms of lost lives and financial assets, and a long-lasting disruptive effect by signaling the beginning of a new type of global armed conflict. Considering the enormity of the events, the markets reacted in a predictable and one might even say orderly fashion. Ironically, the fact that the most visible blow took place in New York City, not far from Wall Street, may have helped by forcing the markets closed for almost a week - action that may well be repeated in the future regardless of where the next event occurs. After the markets re-opened on September 17th, a measured sell-off reached its peak (about -16%) within five trading days, and was entirely erased within one month of the event to the day. Since our Model already had us in a Sell mode when the attacks happened, TimingCube subscribers fared well with the recovery rally triggering a very profitable Buy signal on October 3rd. The first key observation about catastrophes is that by definition they cannot be accurately predicted. Maybe this is why Nostradamus, the world's most famous prophet of disasters, is not exactly renowned as a great stock market prognosticator. The second valuable reflection is that such calamities tend to have a short-lived effect on the stock market. They can cause a temporary plunge but they do not change the underlying market trend. Yes, there is no telling how deep the initial sell-off might be. If it exceeds 9% (or 15%) from our entry point, as measured by the Nasdaq Composite, our Cash signal will act as a safety valve, if we are in a Buy mode at the time. If, as now, we are in Sell mode the brunt of the initial market response would favor our short position. In summary, catastrophic events are inevitable but they are not predictable and they are unlikely to have a lasting effect on the markets. The enduring damage (both financial and emotional) of constantly expecting a disaster and being paralyzed on the side-line far outweighs the risk of being invested when it finally happens. Thus, the best course of action for us Trend Timers is to ignore fear and remember that the trend is our friend. FAQ of the Week Question: I recently saw a leak of the TimingCube signal. Is this OK? First of all we want to thank the subscribers that help us preserve the value of our wealth-building system by reporting mentions of our signal in online forums or even in other financial newsletters. As these loyal subscribers know, it is NOT OK to divulge the current signal to anyone, anytime or anywhere. Any disclosure to a third-party is a direct infringement of the Disclaimer/Terms of Use all subscribers agree to when they sign-up for the service. Giving away the signal is not only unfair to all subscribers that pay for the service, but making the information public can directly undermine the effectiveness of the Model and negatively affect its performance. TimingCube actively monitors many online forums and publications and aggressively pursues any offenders we find. We can always use the help of a few thousand additional eyes and ears to insure no infringement will go unnoticed. Don't get us wrong, we just love it when subscribers mention TimingCube in public forums. Especially if they say good things about us! Warm wishes and until next week. The TimingCube Staff