Continuing in the spirit of providing both our subscribers and prospective subscribers with clear, complete, and transparent information about our performance, live and historical, we have created an enhanced Results page which embodies many of the suggestions and wishes you have sent us.

As you will see, extensive new features and views have been added, so our technical staff of obsessive perfectionists feels that the end product has not yet been sufficiently tested to deserve replacing the current time-proven Results page. Since we did not want to hold back any longer before letting you use these little gems, we felt that offering a Preview version would be a good Holiday compromise. The deal is that you can use the Preview as much as you want, with the understanding that there may be bugs lurking. If you should find any issue or problem, or have any type of suggestion, your sending us a note to support@timingcube.com with a description of the symptoms would be greatly appreciated. And not to worry, in case of doubt, the current known and good Results page remains at your finger tips through the navigation buttons on the left.

So far, all returns we have published were strictly based on market indices, with the one notable exception of the QQQQ which forever gets special treatment, probably for nostalgic reasons. Now, in addition to the market indices we track, you can see the results for an individual ETF, index, mutual fund or security of your choice, as well as pairs of bull/bear mutual funds. Before we peek at these new features, let us look at new ways to view our performance history: Yearly Returns and the "TimingCube Chart".

The Yearly Returns view is a fairly standard reporting format in the financial industry and we are pleased to add it to our array of performance data.

The TimingCube Chart view provides a fast visual grasp of how timely (or not, as the case may be) our signals have been for a given investment vehicle. It provides an easy tool to find out how various investments correlate with our Model. This type of chart had so much success when we first used it in the October 31, 2003 article entitled "The psychology of bull and bear markets", that we decided to make it a standard fixture of our New Results page. The chart plots the price of the ETF, index, mutual fund or security in selectable 4-year periods, and overlays our Model's signals, both as vertical red/green colored stripes and with icons placed at the exact trading points. As an added convenience you can move your mouse over the individual trade icons to obtain pertinent data such as the exact trade date and price.

The "Performance by individual security or index" section is as simple as it is powerful. You can enter the ticker symbol for your investment vehicle of choice (ETF, index, mutual fund, or stock) and have instant access to the entire array of performance metrics such as Annualized Returns, Trades and Cumulative Returns, Wealth Calculator, Yearly Returns, as well as the new TimingCube Chart. Note that in most of the views you can select a time frame with a "... since" dropdown menu. For example, you might check how the Merrill Lynch Internet HOLDRs Trust (Ticker symbol HHH) has performed since our first live signal on 6/18/2001 and compare that with any other investment. For convenience, we have adopted the ticker symbols that Yahoo! Finance uses. If you don't know the ticker for a given company or fund, simply click over to Yahoo's Symbol Lookup feature.

The "Performance by Bull/Bear mutual funds" section lets you personally experiment with the seemingly endless range of bull/bear funds and strategies permutations. What has become painfully apparent in the last two weekly updates about bull/bear mutual fund performance is that you do not want to do the math by hand. This new tool lets you select a Bull fund to be used when the signal is Buy and a Bear fund for when the signal is Sell, and instantly gives you the results. It makes it possible to easily try and compare numerous scenarios with the two fund families, three indices, and match/double option.

We expect the "new and improved" Results page to be fully debugged, thanks to you, and launched "live" in the next few weeks. At that time we will explore a number of ways to use the tool with examples of possible strategies. In the mean time, enjoy!

In view of the performance shortcomings of bull/bear mutual funds (as reported in the two previous Trend Timing School editorials, December 10, 2004 and December 17, 2004), a logical question is why not simply create inverse and leveraged ETFs? Inverse ETFs would appreciate as the corresponding index declines, and leveraged ETFs would amplify (2x) the returns and be available in both bull and bear flavors, just like the bull/bear mutual funds, but without some of the drawbacks afflicting mutual funds.

It has been reported that both ProFunds and Rydex have filed registrations with the SEC (U.S. Securities and Exchange Commission) for such ETF offerings. The SEC has the power to allow or ban such products, but it is widely expected that they will be given the green light sometime during 2005.

We do not have any specifics yet on these ETFs but we can anticipate the following advantages and disadvantages. These funds should provide many retirement account holders with a new and better way to overcome the shorting and margin restrictions. Since they will behave like stocks, it will be possible to trade them at the market open following a signal, and therefore eliminate the one-day lag most mutual funds incur by trading only at the close. In general, ETF costs are substantially lower then mutual funds, but it remains to be seen if this holds true with these instruments. On the down side, we suspect that the management objectives for these ETFs will be to match their benchmark index daily, which will cause the leveraged ETFs to experience the same negative compounding effect as their bull/bear mutual fund counterparts.

Warm Holiday wishes and until next week.

The TimingCube Staff