Market Timing Signals for the Dow, S&P, Nasdaq, and Russell 2000 Indexes

Market Timing Signals

Entry and exit market timing signals for the DJ 30, S&P 500, Nasdaq and Russell 2000
See explanation below on how to use these timing signals

The original market timing formula, the Classic Formula, was first run live on 10/23/96. On 9/4/10, we introduced Version 2. In theory, Version 2 should produce equal or better returns with far fewer trades. Only time will tell if that happens.

Last Update: as of 5/17/13

Version 2

First live run: 9/4/10 Click here for track record

Index	Recent Price	Current Signal Date of Signal & Price	Previous Signal Date of Signal & Price
Dow Jones 30	15,354	BUY on 01/11/13 @13,488	SELL on 10/26/12 @13,107
S&P 500	1,667	BUY on 01/11/13 @ 1,472	SELL on 11/9/12 @ 1,380
NASDAQ	3,499	BUY on 01/11/13 @ 3,126	SELL on 10/26/12 @ 2,988
Russell 2000	996	BUY on 05/10/13 @ 975	SELL on 04/19/13 @ 913

Classic Formula

First live run 10/23/96 Click here for track record

Index	Recent Price	Current Signal Date of Signal & Price	Previous Signal Date of Signal & Price
Dow Jones 30	15,354	BUY on 01/04/13 @13,435	BUY on 7/20/12 @12,823
S&P 500	1,667	BUY on 01/04/13 @ 1,466	BUY on 7/20/12 @ 1,363
NASDAQ	3,499	BUY on 01/04/13 @ 3,102	BUY on 7/27/12 @ 2,925
Russell 2000	996	BUY on 05/10/13 @ 975	SELL on 04/19/13 @ 913

Updated weekly (Saturdays).

Signals provided for entertainment only. Do not make investment decisions based on these signals.

Nasdaq Risk Indicator

Current Value: 5 (Low Risk)

The Nasdaq Risk Indicator (NRI), is not a timing indicator. Instead, it gauges the current risk of investing in Nasdaq stocks. The indicator measures the number of overpriced Nasdaq listed stocks according to a variation of our original Death List formula.

The risk associated with specific NRI values are still being evaluated. Here is our current interpretation:

Below 3: very low risk
3 to 9: low risk
10 to 25: moderate risk
26 to 65: high risk
66+: very high risk

Here are historic values of the indicator going back to May 1998.

Classic Formula Track Record
Click here for a list of all buy & sell signals generated since January 1, 1995.

Market timing is one of the more controversial aspects of investing. Market timers only invest long (buy) when they think the market, or a particular segment of the market, is in an uptrend. Market timing signals based on market indices can be used to trade index options, funds or other products designed to emulate particular indices, or to time the purchase and sale of individual stock appropriate to a particular index.

This is a chart of the S&P 500 Index signals generated by our Classic Formula. This system uses a combination of technical indicators to trigger buy (green arrows) and sell (red boxes) signals.

S&P 500 chart.gif (10425 bytes)

The results are hardly ideal. Even though the system caught most of the major moves, there were periods where it generated repetitive buy and sell signals without making any money (whipsaws), even though the S&P went up.

You can look at timing signals the same way you view fire insurance. Most of the time you pay for insurance without getting anything back. But if your house catches fire, the insurance is a lifesaver. Same thing with market timing. Those whipsaws cost you money. But if the market tanks, the system gets you out in time to fight another day.

If you�re using the market timing signals for stocks, you should use an index appropriate to your stocks. Here are the four indices we cover and the corresponding stocks.

Index	Apply Signal to:
Dow Jones 30	Blue-chips
S&P 500	Major growth companies such as Proctor & Gamble, Citigroup, Target, General Electric, etc.
NASDAQ	Mid- & large-cap tech, mid-cap growth
Russell 2000	Small-caps and momentum stocks

Experts tell us you cannot time the market, and those who try are doomed to miss some of the strongest days before they realize the market is in an uptrend. It�s hard to argue with their logic in a bull market. If you know the market is going to keep going up, your best strategy is to pour more money in on the dips.

But what if the market drops for an extended period of time. Should we just sit there and watch our capital dwindle while the market keeps falling. Wouldn�t it make sense to get out and wait for the market to strengthen before we get back in, even if we don�t catch the absolute bottom.

Our timing system looks only at information contained within the charts. It does not take into account general economic conditions, interest rates, etc. It will not predict market turns caused by unexpected world events such as terrorist attacks, government upheavals, etc. We make no promises that following these signals will be more profitable than a simple buy and hold strategy.