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Turbo Model


Classic Model Description

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
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:
  1. 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.
  2. 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.
  3. 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.
  4. 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
Buy QQQ
Buy IWM
Buy SPY
Sell
Short QQQ
or
Buy PSQ
Short QQQ
or
Buy PSQ
Short IWM
or
Buy RWM
Short SPY
or
Buy SH
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
Buy QQQ
Buy IWM
Buy SPY
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.


Strategies
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.


Investor Profile
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.


Classic Model
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)
 Asia/Pacific (12 country ETFs)
 Europe (12 country ETFs) Africa (1 country ETF)

 
United States
Market
ETF Ticker
Large Cap Dow Jones 30
Wilshire 5000
Large Cap Nasdaq 100
Small Cap Russell 2000
Mid Cap S&P 400
Large Cap S&P 500
Micro Cap Russell 1000

 
North/Latin America
Country
ETF Ticker
Brazil
Canada
Mexico

 
Europe
Country
ETF Ticker
Austria
Belgium
France
Germany
Italy
Netherlands
Russia
Spain
Sweden
Switzerland
Turkey
UK

 
Asia/Pacific
Country
ETF Ticker
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
Singapore
South Korea
Taiwan
Thailand
Vietnam

 
Africa
Country
ETF Ticker
South Africa

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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