What to Trade

Until recently, the best investment vehicles available for trading market indexes (like the S&P 500 or Nasdaq-100) were mutual funds from the ProFunds and Rydex mutual fund families. These are still valid choices; however, a new breed of exchange traded funds (ETFs) has emerged to make the task easier and without the restrictions of mutual funds. They trade in "real time" like stocks through any broker you may be using. Like stocks, you will be charged a commission to buy and sell them. The deep discount brokerages like Scottrade, Etrade, and others make the ETF option very affordable. The cheap commissions of today's discount brokerages and low frequency trading of TimingIndexFunds signals makes for a winning combination. 

TimingCues returns are calculated using the NASDAQ-100 and S&P 500 indexes which can be traded using the symbol shown in parenthesis in the ETF listings below. Other excellent choices for diversification include the Russell 2000 small cap index (IWM) and MSCI EAFE Index iShares which trade under the symbol EFA. Since stock markets of the world tend to trade in the same direction, this is an excellent choice to further diversify and add international exposure to your portfolio while still enjoying the benefits of the signals.

The "1x" in the following table means that the ETF trades identically to the underlying index. For example, if the S&P 500 appreciates by 1%, the investment for the S&P 500 (symbol SPY) appreciates by 1% and so forth. For "2x", leverage is used to move the investment at 2 times the direction of the underlying index. The designation of "Long" reflects an expectation of the stock market (and therefore the ETF) to rise in value. Conversely, "Short" can be used on cash signals in an attempt to profit from market declines.

Leverage and shorting are very valid choices but should only be used by advanced users who understand the investments and are willing to accept greater levels of risk for the potential of greater returns. For most users, the first four ETF's at 1x and some 1x "short" versions are all that is needed. To borrow a phrase from Charles Schwab, these are the "core" investments. The world market ETFs available to subscribers add additional "explore" choices.

Additional details on these and other ETFs can be found at www.etfconnect.com

Strategy: 1x Long and Cash. Invest in the following on a "Long" Signal and move to cash on a "Cash" signal.

Symbol Description
QQQ
1x Long the NASDAQ-100 Index
SPY
1x Long the S&P 500 Index
IWM
1x Long the Russell 2000 Index
EFA
1x Long the MSCI EAFE Index

Strategy: 2x Long and Cash. Invest in the following on a "Long" Signal and move to cash on a "Cash" signal to capture two times (2x) the movement of the index.

Symbol Description
QLD
2x Long the Nasdaq 100 Index
SSO
2x Long the S&P 500 Index
MVV
2x Long the S&P MidCap Index
DDM
2x Long the DJIA Index

Strategy: 1x Short. Invest in the following on a "cash" signal to capture market declines.

Symbol Description
PSQ
1x Short the NASDAQ 100 Index
SH
1x Short the S&P 500 Index
MYY
1x Short the S&P MidCap Index
SSB
1x Short the Short SmallCap600
RWM
1x Short the Short Russell2000
DOG
1x Short the DJIA Index

Strategy: 2x Short. Invest in the following on a "cash" signal to capture two times (2x) the market declines.

Symbol Description
QID
2x Short the NASDAQ 100 Index
SDS
2x Short the S&P 500 Index
MZZ
2x Short the S&P MidCap
SDD
2x Short SmallCap600
TWM
2x Russell2000
FXP
2x Short FTSE/Xinhua China 25
DXD
2x Short the DJIA
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