Introduction to our Market Timing

[garilou]

Bryan,

We have seen!

Louise

[jeff]

looks like the "Market Timing Indicator" works well.

it is amazing to see how quick the numbers can change and how quick the colors can change from green to red in that portfolio WITHOUT the use of Market Timing Indicator.

[bryanmcn]

Jeff
Hard to argue with reality!
Bryan

[bryanmcn]

when was the last time the indicator turned down?

[Super Stock Picker]

The current down signal has been generated on 01/21.

[bryanmcn]

Thanks
And so we can track changes;
The signal is up today - Feb 16, 2010

[garilou]

I have tracked the changes daily between February 2 (started a little late), and Feb 18, (even if the MTI went up on Feb 16), and few times since then (it is so easy with Excel web queries), and could instantly calculate the average savings!

I was impressed!

I tracked the one month return differences, and even since Feb 16, the one month returns still show the average protective effects on the portfolios.
Sure it applied only to stocks in the SSP portfolios.
But it gave me the opportunity of a short and sweet little short on III  (Imperial Metals Corp.)
And the signal does not only say  "Go at cash!", some stocks really do better during bear markets.

But even once that the MTI went up (based on the TSX), some stocks kept their downward momentum, so it convinced me again, that it is not a good thing to rebuild a portfolio right away when the MTI turns green!

Thanks again SSP!
But SSP, when will the "short portfolio" be ready?
Because I still do not trust that market to much ... Last Thursday was probably one of the craziest day in the history, started almost -100, and ended + 110!
The US indexes did not finish so high on that day, but still much higher then at the opening. If I had placed stops, I would have lost so much on that day, whereas I finished the day with a higher then average gain.

A short portfolio would be really appreciated, and NOT only when the MTI is down.

Have a good trading week every one!

Louise
 

[bryanmcn]

Ok. So here it is May 16, 2010

The MTI has been around since Oct 08.
I did some figuring;
The TSX on Nov 3, 2008 was at 9721.
If you had bought it then and sold it Friday at 12015 you would have gained 2294 points

If you had bought and sold the TSX according to the MTI in the same period you would have gained 1529 points and spent a lot more money on transaction costs.

DUH!!

[Super Stock Picker]

Hi Bryan,

Indeed, our market timing indicator is not designed to improve the performance over the market but to reduce the volatility of your portfolios. It is a trailing indicator that will always get late after the beginning of the moves.

As a result, there is a cost in terms of performances. But the addition is that it would tell you to get out in down turns. Of course, in bull markets your results will be lower compared to the situation when you are always invested, but market corrections occur from times to times, and that's when the timing add-on kicks in.

Particularly with portfolios as volatile as the SSP ones, this is important not to stay in the market when things turn bad.

In the case of the UPM v4, I have also bring some data since Oct 08:
UPM v4: perf +48%, invested 100% of the time
UPM v4+: perf +40%, invested 62% of the time
(during that period there were 254 up days and 154 down days)

Then, if you adjust the returns with the time invested in the market, you'll noticed that the UPM v4+ portfolio did much better.

Once again, it is all about what you're looking for: raw performance or risk control.

[bryanmcn]

PResently (Dec 10, 2011) the MTI  buy trigger seems to be "chasing" the TSX down to trigger a buy. Its now only about 40 points above. Have the parameters been tweeked?

[Super Stock Picker]

No, nothing has been changed since its initial design.

What you see is only due to the current market conditions.

[DCA]

Bryan,  I have seen this behavior before.  More pronounce now because of the sideways skittering the market has been doing.  Unless the market moves soon I am going to have my first year of shrinkage.  Even happens to McDonalds sometimes.

D