Frequently Asked Questions

Dr K Market Direction Model
Do you trade the market timing model just for ETFs, or do you also use it for stocks?

I use the timing model to keep me on the right side of the market. When it issues a buy signal, I look to aggressively accumulate leading stocks in leading industry groups. I buy stocks rather than ETFs because I can make more money buying stocks. That said, with the advent of 2-times and 3-times ETFs, big money can be made going long 100% a 3-times ETF such as TYH which moves 3-times the Russell Technology 1000 and is a relatively good proxy for 3-times the NASDAQ Composite.


In fact, my Market Direction Model was up +55.1% from June 1, 2009 - June 1, 2010 in a test fund using actual money, with exposure to the market less than half the time. Rothstein Kass, well recognized in the world of fund management, has audited the account. In a separate account that was not using actual money, I wanted to see how my system held up against a volatile instrument such as the 3-times technology ETF TYH, going 100% long on buy, 100% short on sell, and 100% cash on a neutral signal. Such instruments did not exist until the last year, so this gives big opportunity for profit that did not exist before. From March 12, 2009 (the day of the big first FTD) to June 30, 2010, the model was up +207.4%.

Published: Sep 15 2010