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Classic Model Description |
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TimingCube
has developed an innovative investment system that only requires minimal
trading and combines a broad stock market Trend Timing
approach for Buy/Sell
directional guidance with the momentum of top-ranked world markets. At the
heart of the system is our 100% mechanical, unemotional market timing Classic Model that is both powerful and simple to use. Launched in 2001, our Classic Model uniquely identifies the broad predominant stock market trend and therefore
provides investors with an effective "all-weather" alternative
to Buy and Hold investing. Because world stock markets tend to be very correlated,
our signals can be used to successfully time both U.S. and international
ETFs. Recognizing that relative strength always changes between markets,
we also developed a World ETF Ranking Model to identify
the geographies that show the strongest momentum and potential for superior
returns. By combining these two dimensions, a timing Model that identifies
the broad market trend and a ranking Model that gives us the best markets
to invest in, the TimingCube
Classic Model provides a unique tool designed to help investors achieve
outsized returns over the long term. |
Getting started with
the TimingCube
Classic Model is extremely easy. Once you have decided
how much money you want to invest with the system, all you need to know
is what our current Classic timing signal is (Buy,
Sell or Cash)
and what markets are ranked best.
Our Trend Timing Classic Model is run daily after the New York stock market
closes, and we update our Web site and Signal by Phone
message accordingly by 9:00 pm ET that same day. If a new signal is triggered,
TimingCube
also automatically sends an e-mail to all active subscribers that have elected
to be notified of Classic signal changes. That way, you don't have to check
the site every day to ensure that you are not missing out on a new signal.
In order to achieve the full benefit from any signal change, you should
act on it as soon as possible. For
its part, our World ETF Ranking is updated on a weekly
basis, after the close on Friday. A "Weekly Update"
is also posted on the Web site on Fridays. The latest and archived updates
can be viewed on the "Weeklies" page after you
log in. To establish your portfolio and start trading with our Classic Model,
simply follow the steps below.
Getting started with
the TimingCube
Classic Model:
- Decide how to
allocate your funds. Our World approach allows you
to diversify internationally by investing in the strongest world markets
during Buy signals. You
can also use our Classic Model signals to trade specific U.S. indexes:
for reference, we track the results obtained for the Nasdaq 100, Russell
2000 and S&P 500 when trading the corresponding ETFs (QQQ, IWM and
SPY respectively) according to our signals.
- Select your
strategy between the more aggressive Long and Short,
which shorts the market during Sell
signals, and Long Only, which simply goes to
cash when our signal is Sell.
- Log in to the
TimingCube
Web site and obtain our current Classic Model signal and World ETF Ranking's
Top 5 ETFs from the Classic Model "Signal & Ranking"
page.
- Establish
and maintain your portfolio according to the following table (see
the "Strategies" section below
for all the details):
|
Implementing
the Strategies with ETFs
|
|
Classic Signal
|
World
|
Nasdaq
100
|
Russell
2000
|
S&P
500
|
Strategy
1
Long & Short |
Buy |
Buy
the
World ETF Ranking's
Top 5 ETFs.
Rebalance every 4 weeks
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|
Sell |
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Cash
|
Cash
or
Money Market Fund |
Cash
or
Money Market Fund
|
Strategy
2
Long Only |
Buy |
Buy
the
World ETF Ranking's
Top 5 ETFs.
Rebalance every 4 weeks
|
|
|
|
Sell
or
Cash |
Cash
or
Money Market Fund |
Cash
or
Money Market Fund
|
Note:
when the Classic signal changes, any existing position should be liquidated
before the new one is taken. |
Many subscribers
use our service to trade only specific broad U.S. indexes, such as
the Nasdaq 100, Russell 2000
or S&P 500
. We report the returns obtained using the corresponding ETFs on our "Results"
page. However, better performance is achieved by diversifying beyond just
the U.S. indexes to invest in the top-ranked markets. Investors who want
to take advantage of this opportunity will use our World ETF Ranking in
conjunction with our Trend Timing Classic signals (we refer to this as the
World approach). Whether you decide to stick to U.S markets
only or instead follow the World approach to diversify internationally,
we provide two simple strategies that will help you achieve strong, consistent
long-term results, namely the Long and Short and Long
Only strategies.
-
Strategy
1: Long and Short
This strategy is designed to make you profit whether the market
is going up or down. We believe this strategy offers the best
risk/reward ratio for most investors. It keeps you invested whether
our timing Model tells us that the predominant market trend is
up or down:
- When our Classic Model issues a Buy signal,
you liquidate your current short positions (if any), and then buy
the market through shares of your selected investment, therefore establishing
a long position. Practically, if you follow the World
approach, you invest equally in the World ETF Ranking's Top 5 ETFs
and rebalance every 4 weeks while the Buy
signal remains in effect. If you trade a specific index such as the
S&P 500, you just buy the corresponding ETF (SPY
in this case).
- When our Classic Model issues a Sell signal,
you liquidate your current long positions (if any) and then sell the
market short by actually shorting shares of your selected investment
or buying the corresponding inverse fund, therefore establishing a
short position. Practically, If you follow the World
approach, you sell your 5 ETF positions and go short QQQ shares or
instead buy the corresponding inverse ETF (ticker symbol PSQ). If
you trade a specific index such as the S&P 500, you just short
the corresponding ETF (SPY in this case) or instead buy the corresponding
inverse ETF (ticker symbol SH).
- When our Classic Model issues a Cash signal,
you liquidate your current positions, long or short, and keep the
proceeds in cash or in a money market fund.
Note:
Since selling short requires a margin account, qualified retirement
accounts such as an IRA or a 401(k) are not eligible for shorting
stocks. However, the same effect can be achieved by buying inverse
ETFs or mutual funds, as these investment vehicles are authorized
in retirement accounts.
- Strategy
2: Long Only
This is the most conservative fund investment strategy we follow.
It keeps you invested only when our timing Model tells us that
the predominant market trend is up, and lets you step aside during
downtrends:
- When our Classic Model issues a Buy signal,
you buy the market through shares of your selected investment, therefore
establishing a long position. Practically, if you follow the World
approach, you invest equally in the World ETF Ranking's Top 5 ETFs
and rebalance every 4 weeks while the Buy
signal remains in effect. If you trade a specific index such as
the S&P 500, you just buy the corresponding ETF (SPY in this case).
- When our Classic Model issues a Sell or
Cash signal, you liquidate
your long positions and keep the proceeds in cash or in a money
market fund.
You can check
the performance and returns for both strategies on the
"Results"
page. For investors who follow the World approach,
we also provide results for the Buy and Rebalance
strategy, which ignores the timing signals altogether and stays fully
invested in the World ETF Ranking's Top 5 ETFs at all times, rebalancing
every 4 weeks. Because this strategy is always invested and never
short, it is similar in concept to the Buy and Hold approach for a
single index/ETF and therefore provides for an appropriate way to
compare returns. If you are a subscriber and log in to the site, all
returns on the
"Results"
page will be current as of the last trading day. We do not recommend
using the Buy and Rebalance strategy. If you are
not a subscriber, all results will be delayed by twenty trading days.
Even though we favor ETFs, mutual
funds can be used to implement our strategies and are viable alternatives
for qualified retirement accounts. Direxion,
ProFunds and
Rydex offer
fund families that are suitable for that purpose, with mutual funds
designed to match or inverse the performance of most indexes.
Our Classic Model is
intended for serious long-term investors, not frequent traders or speculators.
Our typical subscribers seek a low-maintenance approach that outperforms
under all market conditions. They do not have the time or desire to spend
their days studying markets and trading. On average, TimingCube
only issues three to five signals in a typical year, allowing investors
to minimize their trading activity.
There are no prerequisites or particular investment experience requirements,
and no complicated methodology to learn. Because of this combination
of simplicity and performance, we believe that TimingCube
belongs in any investor's portfolio. You could start with as little
as a few thousand of dollars or millions. The money can be in regular
brokerage accounts or any qualified retirement accounts that allow
trading of ETFs or mutual funds. Our service is therefore well suited
for managing portions of a retiree's nest egg.
If you are interested in our investment approach but do not have the
desire to do your own trading, the staff of our sister company, MARKETTREND Advisors, will be happy to manage a TimingCube-based portfolio
on your behalf.
Trend
Timing Signals
TimingCube's
proprietary stock market Trend Timing Classic Model is based primarily on
price and volume action of the Nasdaq Composite Index
. Developed in the first half of 2001 using years of market data and
experience and, having been backtested to 1989, it issued its first
"live" signal on June 18, 2001, with the primary intent of timing
the QQQ
. We then founded our Company and launched the TimingCube
Web site in the fall of 2001. As our stock market analysis and investment
research established the high correlation between our Nasdaq Composite
Index driven Model and other major market indexes, U.S. and international,
we extended our reach from strictly QQQ timing to other indexes such
as the Russell 2000
and the S&P 500
, as well as numerous other world stock markets. Investing according to
our Classic Model has proven extremely profitable, as shown on our "Trades History"
page. For complete accountability, our trades and returns are independently
verified and tracked by the Hulbert Financial Digest and TimerTrac.com.
Results and backtesting for the current Classic Model which went into effect
on July 14, 2006 can be found on the "Results" page.
Based purely on changes in market conditions, TimingCube's
Trend Timing Classic Model will generate a Buy,
a Sell or a Cash
signal. Once a signal has been issued, it remains in effect until a new
signal invalidates it.
A particular type of Cash signal,
similar to a stop loss, is automatically issued by our Classic Model if
the Nasdaq Composite Index
moves against our current position by more than
9% from our Buy or Sell
entry point. This is designed to keep any losses to a reasonable minimum
from the entry point when we are most vulnerable, as no timing Model will
always be 100% right. Once the Nasdaq Composite Index has advanced 7% or
more from our entry point, the maximum drawdown limit is ratcheted up to
15% and the Cash signal becomes
a trailing stop. This means that from then on, if the Composite declines
15% from its most recent closing high on an active Buy
signal, or moves up 15% or more from its recent closing low on an active
Sell signal, a Cash
signal will be issued and you will be notified. When a Cash
signal is generated, you should liquidate your current long or short investments
and keep the proceeds in cash or in a money market fund until a new Buy
or Sell signal is issued.
World ETF Ranking
TimingCube's
World ETF Ranking Model compares the momentum of various broad world
market ETFs over a multi-month period to identify the ones most likely
to outperform. The algorithm's specific ingredients and recipe are
proprietary and therefore are not disclosed.
There are many stock markets around the world but we automatically
narrowed the field with some of our requirements, such as a minimum
of 3 years of publicly accessible index ETF data. We currently rank
35 domestic and country Exchange Traded Funds (ETFs) divided as follows:
United States
(7 ETFs representing different market segments)
|
North/Latin
America (3 country ETFs)
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Asia/Pacific
(12 country ETFs) |
Europe (12
country ETFs) |
Africa (1 country ETF)
|
Market
|
ETF
Ticker
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Large
Cap Dow Jones 30
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Wilshire
5000
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Large
Cap Nasdaq 100
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Small
Cap Russell 2000
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Mid
Cap S&P 400
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Large
Cap S&P 500
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Micro
Cap Russell 1000
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|
Country |
ETF
Ticker |
Brazil |
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Canada |
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Mexico |
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Country |
ETF
Ticker |
Austria |
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Belgium |
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France |
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Germany |
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Italy |
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Netherlands |
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Russia |
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Spain |
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Sweden |
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Switzerland |
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Turkey |
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UK |
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Country |
ETF
Ticker |
Australia |
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China |
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Hong
Kong |
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India |
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Indonesia |
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Japan |
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Malaysia |
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Singapore |
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South
Korea |
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Taiwan |
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Thailand |
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Vietnam |
|
Country |
ETF
Ticker |
South
Africa |
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Note:
Investing in international index ETFs comes with a set of specific
risks which at times can include country or regional economic/natural/political
issues impacting local stock markets, poor correlation with world
markets and/or TimingCube
Classic signal, high volatility, low liquidity and currency fluctuations. |
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