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Celebrating one year of Weekly Updates!

It certainly does not feel like fifty two weeks have gone by since we yielded to subscriber pleas for more information in the form of periodic communications and began publishing the Weekly Updates. As we set off for the second year, we would like to continue the time-tested TimingCube tradition of asking for your feedback.

Please help us serve you better by telling us what you think of the Weekly Updates. Are they useful? How frequently do you read them? Is the content informative and easy to understand? Are they too long, too frequent, or too complicated? How could they be improved?

To provide your comments, simply send us an e-mail at support@timingcube.com.

Thank you for your help and support.


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.

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Market Update
After a weak rally attempt on Tuesday following the Fed's decision to increase the funds rate by 0.25% as expected, markets moved sharply lower on Wednesday and failed to recover any ground by week's end. The decline was caused by several factors: more companies warned of disappointing quarterly results, oil prices once again moved higher and economic figures came in generally weaker than expected. It seems that more and more investors are getting nervous about the pace of the economic recovery. In fact, having a look at the way the bond market has behaved lately, one has to wonder if there will be a recovery at all: the yield curve has flattened, implying that the economy is about to slow down, not to accelerate. If this is indeed correct, it does not bode well for the stock market going forward.

The Nasdaq 100 lost 1.91% on the week, while the Russell 2000 and the S&P 500 respectively shed 1.26% and 1.63%. All major indices have now joined the Nasdaq Composite and fallen below their respective 200-day simple moving averages (SMA). The week's action has reinforced our Sell signal, which therefore remains active.

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Trend Timing School
One year of Trend Timing School

Having completed the Trend Timing School freshman year we want to pause briefly to recollect the road traveled and take stock of the lessons learned.

Unlike many fields of study, Trend Timing is very permissive and does not mandate a minimum curriculum. Many subscribers are attracted to the system because it is extremely simple and requires very little time and effort to implement. With a minimum of discipline to follow the signals in a timely manner, one could skip all the classes and still be on the path to wealth.

Many however, find more peace of mind and satisfaction in the knowledge gained through study. From years of experience we know that for most investors, understanding the stock market, the Trend Timing approach and philosophy, as well as the emotional pitfalls, makes it a lot easier to stick with the program and resist the temptation we all have at times to second-guess and outsmart the system.

For the subscribers that joined TimingCube after we started publishing the Weekly Updates, and for those that left the reading for another time, a year's worth of material can be a little overwhelming and excessive. To simplify and abbreviate the task we examine the courses that make up the Trend Timing School study program and, as a guide, we include a syllabus for each course consisting of a list of some of the most salient and noteworthy editorials. There are many others and the FAQ of the Week articles provide a wealth of additional information.

Trend Timing School Curriculum

The Trend
  The model and indicators used to identify the broad market trend which drives our signals 

Trend Timers
  The people that practice Trend Timing, their style and personality, and how they control their emotions 

Trend Timing 101
  The Trend Timing investment discipline and philosophy, and how it compares with other approaches 

The Stock Market
  Key markets characteristics, history and behavior, and the mysterious ways in which they move 

Investing Mechanics
  Investment vehicles and the basic "how to" techniques to implement Trend Timing strategies 

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FAQ of the Week
Question: What are the interest rates associated with margin accounts?

Investors that want to implement Strategies 2, 3, and 4 (see the "Our Service" page for details) will need to sell short and/or trade on margin, and therefore must open a so-called margin account. Note that a qualified retirement account, such as an IRA, cannot be a margin account. An alternative is to use the various bull and bear index mutual funds (see the "What to trade?" page) which circumvent the need to short or trade on margin, and is compatible with retirement accounts. The fees and expenses charged by these mutual funds will cover for any interest rate costs they might incur.

It sometimes comes as a surprise that selling short (see "Short selling explained") and trading on margin (see "Margin trading explained") require you to pay interest to your broker. The simple reason is that for both types of transactions you are effectively borrowing money (by making use of securities in his inventory) and your broker wants to be compensated for the loan. Note that selling short on margin costs you twice the nominal rate.

The interest rate - or margin rate - brokers charge are typically indexed to the prevailing industry interest rates as measured by the prime rate or other benchmark (which means that they move up or down over time), and the mark-up varies from broker to broker depending on how much profit they seek. Today, the going margin rates for small sums (e.g. $10,000) range from about 5% to 9% per year. The rates gradually decrease for larger amounts. So, for example, if you invest $10,000 on margin for six months your broker will charge you somewhere between $250 and $450.

Always make sure you understand the costs and risks of short selling and margin trading before you do it.

Warm wishes and until next week.

The TimingCube Staff

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