Welcome to TimingCube.com! TimingCube offers a stock market QQQ timing service for long-term investors. It provides a buy and sell timing signal for QQQ trading or investing in Nasdaq 100 mutual funds (Rydex, Profunds). It dramatically outperforms Buy and Hold QQQ investing.
Welcome to TimingCube.com! TimingCube offers a stock market QQQ timing service for long-term investors. It provides a buy and sell timing signal for QQQ trading or investing in Nasdaq 100 mutual funds (Rydex, Profunds). It dramatically outperforms Buy and Hold QQQ investing.

October 10, 2003 Update


Since last week's update, many of you seized the opportunity and reduced their subscription costs by converting their monthly subscription to a yearly plan. For those who missed last Friday's FAQ of the Week, make sure you read about this no-risk bargain!
 Signal Update
Current Signal Performance as of 10/10/2003
Signal Type
Trade Date
Return since issued
Buy
04/03/2003
+31.42%

Cumulative Returns since First TimingCube Live Signal (06/18/2001) as of 10/10/2003
Long Only
Long Only with Margin
Long & Short
Long & Short with Margin
Buy & Hold
+82.56%
+196.08%
+237.48%
+798.85%
-17.89%

Note: Performance and Returns above are obtained by using QQQ as the investment vehicle.

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 Market Update
It has been another good week for the markets.

Bolstered by better-than-expected employment numbers and promising earnings reports by such companies as Yahoo!, the market closed the week higher, with QQQ gaining 2.40%. Both the Nasdaq Composite index and QQQ are now at new 52-week highs. This is quite a welcomed change from the major downtrend we saw from 2000 to 2002!

This week's action has confirmed that we are on the right side of the trend. Our Buy signal is therefore still in effect.

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 Trend Timing School
The difference between fundamental and technical analysis

Before we can dive into the Model we use to determine the major market trend it is important to understand the type of analysis we favor and what type of information is relevant. The two main schools of investing thought are fundamental analysis and technical analysis.

Analyzing company fundamentals has been the bread and butter for generations of Buy and Hold stock pickers selecting the companies that represent the best value and probability of increasing shareholder equity. Reams of company data such as earnings per share (EPS) and price/earning ratios (P/E) are compared with that of peers, competitors, and industry averages to identify the elusive undervalued jewel. This approach suffers from the widely recognized flaw that when the market goes down the stock of over 2/3rd of all companies goes down, regardless of their fundamentals. The next step then is for economists and market strategists to apply fundamental analysis on a macro scale to determine future trends of the market as a whole or that of specific sub-segments. Broad measures such as employment levels, inventories, the money supply, interest rates, and currency fluctuations can all be indicators or even catalysts for stock market movements. The stated intent of such trend forecasting activity is to shift portfolio weighing from one industry group to another or to re-allocate assets between equities, bonds, and cash. This is nothing more than a form of market timing! The main issue with fundamental analysis is that the markets are influenced by so many unknown factors such as news and investor psychology that they ultimately move in mysterious ways, and attempts to predict are mostly futile.

Over the past several years technical analysis has become a popular method of evaluating securities and markets. Instead of attempting to measure a market or a security's intrinsic value, technical analysis strictly looks at past and present market data such as price and volume, and attempts to identify patterns that suggest future activity. The primary tools of the trade are various types of charts, moving averages, relative strength indexes, and support/resistance zones. While many favor complex statistical analysis tools and the recognition of patterns such as head and shoulder, cup and handle, or double bottom formations, we try to keep it simple. As trend timers we are strong believers in listening to what the market is telling us, recognize the predominant trend, and following it. While our Model does look at various indicators such as moving averages it leans most heavily on the relationship between price and volume action.

Good technical analysis tutorials can be found at www.investopedia.com or www.stockcharts.com.

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 FAQ of the Week
Question: What should I do between signals?

This question comes from new subscribers, people with new money to invest and those that for whatever reason missed or did not act on the current signal. The general concern is that, with the impressive run-up we've had since the Buy in April, there is a risk that a Sell signal will be issued shortly after investing funds, which may result in a loss. While this is a possible scenario, study of history shows that signals have lasted up to a year and a half and raked-up gains of over 200%. If you wait for the next signal you might be sitting on the sidelines for a long time and give up huge profits.
It is, of course, up to you to decide, but we usually recommend following the current active signal, investing in stages over a few weeks. That way, you dollar-cost average and take advantage of any market dips while limiting your risk. This worked perfectly during the short corrections we experienced in August and September. It is worth noting that the same exact reasoning applies to those of you that are tempted to outsmart the system by selling now in anticipation of an imminent Sell signal. The worst thing with any system is to start second-guessing it and ending up on the wrong side of the trend. Stay disciplined and the profits will follow.

Warm wishes and until next week.

The TimingCube Staff

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