Market Timing Results

Index	Market Direction Model Trading Return 2000 - 2010	Buy-and-Hold Return 2000 - 2010
NASDAQ Composite	+741.1% (conservative approach using NO leverage)	-34.8%

2011 (Jan 1 - May 31)	+46.8%	Example using all services including the market timing service during a very challenging period of a choppy, go-nowhere market
2009 - 2012 (4 years)	+402%	Performance of Market Direction Model using only market timing service ETF TECL with NO margin vs. S&P 500 57.9% (buy-and-hold) and vs. NASDAQ Composite (buy-and-hold) 91.4%
09/05/12 - 02/01/13	+62%	Performance of Dr K UVXY model using ETF UVXY. Further critical adjustments were made to the model on 09/05/12. See UVXY table below for full results. The model is still in beta

Note: All data shown below are delayed by up to two months for non-members.

Members receive emails in real-time whenever the model switches signals. We include a list of Exchange Traded Funds (ETFs) we think are best bought at the time of the switch in signal. The list of ETFs we give with the model signal act as an array of ETFs from which subscribers can choose to purchase at the time of a change in signal, based on their own leverage and specific vehicle preference. Note, the graphs below show over 35 years worth of data on the X-axis so even the smallest blip in the graph may represent a month or two of data.

Members also receive emails in real-time on all of our stock buy, pyramid, sell, and short suggestions so they can immediately take action. If you are a member, please log in to view the latest market timing signal and all past reports with no time delay. If you have any questions, contact us, and we will quickly respond.

Stock market timing - Dr K Market Direction Model performance

GRAPHICAL EXAMPLE OF THE MODEL'S BUY, SELL, AND NEUTRAL SIGNALS:

To give investors a better idea of how the market direction model works, here is a one-year example of buy, sell, and neutral signals issued by the model on the 3-times ETF TYH (ticker changed to TECL June 29, 2012). From March 12, 2009 - May 14, 2010, the market direction model was up +183.9% going 100% long TYH on a buy signal, 100% short TYH on a sell signal, and 100% cash on a neutral signal. You can see the exact dates of these signals in the TYH table Timing Model profit/loss on TYH shown below. Note, the model's fail safes kicked in which minimized losses while the gains made during the trends more than made up for the small losses. Of course, due to the highly aggressive nature of this account, drawdowns as high as -18.5% were not unusual but that is the price to pay to get to +183.9%. Note, had you been using a 1-times ETF, your gains would be roughly 1/3 of those shown, but your drawdowns would also be roughly 1/3 of -18.5%, or -6.1%

You will notice in the tables below how the Market Direction Model's gains on a true signal more than make up for the small losses. You should notice that a string of small losses can occur during trendless, volatile periods which are the most challenging not just for the model but also for traders and investors who are attempting to buy or short individual stocks. Such a period has characterized much of 2012. Fortunately, such periods always come to an end, new trends begin, and the model's gains in catching these trends have always more than made up for the small losses, thus, the model's long term returns average out to be about +32%/year. Had the 3-times ETFs that exist today existed from inception, the model's long term returns using 3-times ETFs would probably be 3-times its long term +32%/year average, or roughly +99%/year. Keep in mind that the drawdowns in getting such a return would also be 3-times as great, so position size accordingly and know your risk tolerance levels.

Timing Model profit/loss on NASDAQ Composite - Annualized return July 1974 - April 2013: +31.21 % / year [100% long Nasdaq Composite on buy signal, 100% short Nasdaq Composite on sell signal, 100% cash on neutral signal]

Date	Signal	% gain / loss	$1 becomes
04-10-2013	Buy	0.56	37315.98
04-03-2013	Cash		37109.73
03-05-2013	Buy	-0.4	37109.73
03-05-2013	Cash		37259.27
02-25-2013	Sell	-2.46	37259.27
12-17-2012	Buy	3.77	38199.34
12-13-2012	Cash		36812.72
12-11-2012	Buy	-0.61	36812.72
11-29-2012	Cash		37040.3
11-07-2012	Sell	-1.28	37040.3
11-01-2012	Cash		37521.98
10-18-2012	Sell	2.21	37521.98
10-15-2012	Cash		36711.15
08-14-2012	Buy	0.52	36711.15
08-07-2012	Cash		36521.38
08-02-2012	Sell	-3.82	36521.38
07-26-2012	Buy	0.13	37971.94
07-25-2012	Cash		37921.41
07-25-2012	Buy	-0.41	37921.41
07-18-2012	Cash		38076.96
07-11-2012	Sell	-2.24	38076.96
07-11-2012	Cash		38950.71
06-29-2012	Buy	-1.03	38950.71
06-29-2012	Cash		39355.36
06-25-2012	Sell	-1.63	39355.36
06-21-2012	Cash		40005.88
06-20-2012	Buy	-2.04	40005.88
06-14-2012	Cash		40837.82
06-07-2012	Sell	0.24	40837.82
06-05-2012	Cash		40739.95
05-09-2012	Sell	5.71	40739.95
05-06-2012	Cash		38539.66
04-26-2012	Buy	-2.94	38539.66
04-20-2012	Cash		39708.93
04-19-2012	Sell	0.07	39708.93
04-12-2012	Cash		39682.72
04-10-2012	Sell	-1.28	39682.72
04-04-2012	Cash		40199.02
03-13-2012	Buy	0.5	40199.02
03-08-2012	Cash		40000.06
03-06-2012	Sell	-2.27	40000.06
01-25-2012	Buy	3.6	40931.11
12-27-2011	Cash		39509.6
12-18-2011	Sell	-2.38	39509.6
12-14-2011	Cash		40472.29
12-02-2011	Buy	-3.12	40472.29
11-11-2011	Cash		41773.65
11-10-2011	Sell	-2.49	41773.65
11-01-2011	Cash		42840.56
10-27-2011	Buy	-1.64	42840.56
10-20-2011	Cash		43553.01
10-19-2011	Buy	-2.39	43553.01
10-07-2011	Cash		44621.58
10-05-2011	Buy	2.94	44621.58
08-31-2011	Sell	6.12	43347.55
08-31-2011	Cash		40846.39
08-26-2011	Buy	3.28	40846.39
08-23-2011	Cash		39547.52
08-16-2011	Sell	3.26	39547.52
08-11-2011	Cash		38297.32
08-02-2011	Sell	11.65	38297.32
07-27-2011	Cash		34302.43
07-13-2011	Buy	-1.43	34302.43
07-12-2011	Cash		34798.31
07-11-2011	Buy	-0.97	34798.31
06-27-2011	Cash		35140.13
06-22-2011	Sell	-0.82	35140.13
06-21-2011	Buy	-0.11	35431.86
05-31-2011	Cash		35471.64
05-05-2011	Sell	-0.97	35471.64
03-24-2011	Buy	2.54	35819.89
03-16-2011	Cash		34932.43
03-15-2011	Buy	-0.61	34932.43
03-08-2011	Sell	3.65	35146
03-03-2011	Buy	-2.36	33907.71
02-23-2011	Cash		34725.87
02-01-2011	Buy	-0.06	34725.87
01-31-2011	Sell	-2.52	34745.56
01-20-2011	Cash		35642.53
01-12-2011	Buy	0.31	35642.53
12-10-2010	Cash		35530.97
12-08-2010	Sell	-1.12	35530.97
12-07-2010	Buy	-1.04	35932.37
12-01-2010	Cash		36308.17
11-16-2010	Sell	-3.12	36308.17
09-01-2010	Buy	13.97	37476.89
08-11-2010	Sell	3.02	32883.4
07-07-2010	Cash		31918.4
06-30-2010	Sell	-1.56	31918.4
06-07-2010	Cash		32422.86
05-25-2010	Buy	0.06	32422.86
04-28-2010	Sell	10.31	32403.07
04-22-2010	Cash		29375.54
04-19-2010	Sell	-1.99	29375.54
03-01-2010	Buy	8.51	29970.83
02-18-2010	Cash		27620.91
01-27-2010	Sell	-1.53	27620.91
01-07-2010	Cash		28050.21
Earlier results

Dr K UVXY: After rigorous ongoing research into UVXY in the Dr. K laboratory, we will issue buy, cash, and sell signals on UVXY when the odds are deemed favorable. Since UVXY sometimes does not correlate with the CBOE Volatility Index (VIX), other variables were used in conjunction with the VIX such as institutional money flow in leading, high relative strength, super cap (>$20 billion) stocks.

There was a refinement made on 05-09-2012 which, while in beta testing mode, did not prove out, then further testing was done thus no signals were issued between 06-14-12 and 09-05-12, which culminated in the present version of the model as of the 09-05-2012 signal.

Note: Dr K UVXY is still a work in progress. The table below shows how the model has performed in real-time with the first three signals from 4-19-12 to 4-27-12 representing TVIX, and all subsequent signals representing UVXY, simply because UVXY has been found to inversely correlate more smoothly with market direction. The first signal is a cash signal, meaning to do nothing until the model switches to either a buy or a sell. As with all our services, members receive real-time updates via email whenever there is a change in signal.

Date	Signal	% gain / loss	$1 becomes(new)	$1 becomes(old)
04-24-2013	Sell	9.73	1.17*
04-24-2013	Cash		1.07
04-23-2013	Buy	-1.38	1.07
04-10-2013	Sell	6.29	1.09
04-03-2013	Cash		1.03
03-25-2013	Sell	-3.02	1.03
03-05-2013	Cash		1.06
02-28-2013	Buy	-8.54	1.06
02-27-2013	Cash		1.16
02-25-2013	Buy	-19.12	1.16
01-10-2013	Sell	12.83	1.44
12-26-2012	Cash		1.28
12-17-2012	Sell	-28.61	1.28
12-14-2012	Cash		1.79
12-12-2012	Sell	-11.74	1.79
11-14-2012	Cash		2.03
11-12-2012	Sell	10.72	2.03
11-07-2012	Buy	5.46	1.83
11-01-2012	Cash		1.74
10-18-2012	Buy	16.82	1.74
09-05-2012 ***	Sell	48.84	1.49
06-14-2012	Cash			0.53
06-14-2012	Buy	-9.32		0.53
06-11-2012	Cash			0.59
06-06-2012	Buy	-27.74		0.59
06-01-2012	Cash			0.81
05-31-2012	Buy	13.03		0.81
05-29-2012	Sell	-9.88		0.72
05-11-2012	Cash			0.8
05-09-2012 **	Buy	-3.76		0.8
05-07-2012	Cash			0.83
05-01-2012	Sell	-14.25		0.83
05-01-2012	Cash			0.97
04-27-2012	Buy	0.15		0.97
04-20-2012	Cash			0.97
04-19-2012	Buy	-2.53		0.97
There are no earlier results

*As of 05-17-2013 (intraday or end of day, depending)

** Reversion to the mean component and fail-safe level adjusted from this day forward

*** Further critical adjustments made to the model

Note, while the returns in the backtests resulted in MASSIVE gains in the high triple digit percentage range since inception of the TVIX (Nov 30, 2010) to the end of the backtest (April 10, 2012), a VERY HIGH RISK had to be expected. Indeed, losses as high as -38.2% on one signal were recorded, the largest drawdown over a series of signals was -56.6%, and larger drawdowns are possible in the future. To deal with this issue, a maximum loss fail-safe of -19% is in place which reduced the maximum drawdown over a series of signals to -33.6%. This means that on any given signal, the maximum loss should be roughly -19% while the maximum loss across a series of signals so far has been -33.6%. Of course, past testing never guarantees future performance as larger drawdowns are possible in the future

Nevertheless, it is ESSENTIAL that one position sizes with care when using these signals. We would suggest either using only a small amount of your capital, such as 20% maximum, or pyramiding a position starting with an even smaller amount of capital, then allowing yourself a larger maximum % only when you have sufficient gains in your position.

Since theoretical gains over a period of about a year in these backtests were in the high triple digit percentage range:

If you were to grow your 20% allocation by 50%, this would increase your total account value by a net of +10%.
If you were to grow your 20% allocation by 150%, this would increase your total account value by a net of +30%.
If you were to suffer a -56.6% drawdown on your 20% allocation, this would decrease your total account value by a net of -11.3%.

Note, to achieve the high triple digit percentage gains over the lifetime of the backtest, the -56.6% drawdown (not using the -19% failsafe) was made up in about 9 weeks. In other words, a gain of +76.7% (=1 divided by 0.566) was achieved over a series of signals in about 9 weeks, right after the -56.6% drawdown which occurred over about 6 weeks. Thus, signal changes can occur with greater frequency with the Dr K UVXY Model than with the Dr K Market Direction Model.

ALTERNATIVE to TVIX: UVXY is a 2-times vehicle that potentially inversely correlates more smoothly with market direction than 2-times TVIX so the table shown below will represent UVXY instead of TVIX after the first three signals (from 4-19-12 to 4-27-12). If one wishes to roughly halve losses, one may opt instead to use 1-times vehicles such as VXX (1-times VIX). VXX has been trading since January 30, 2009. In backtests, losses as high as -20.9% on one signal were recorded, and the largest drawdown over a series of signals was -31.9%, though larger drawdowns are possible in the future. Note that while losses are roughly halved, gains are also roughly halved. Thus your risk/reward stays the same but with roughly half the volatility.

Timing Model profit/loss on TECL (formerly TYH) - 3x ETF Direxion Tech Bull - Annualized return March 2009 - April 2013:
+45.82 % / year [100% long TECL on buy signal, 100% short TECL on sell signal, 100% cash on neutral signal]

Date	Signal	% gain / loss	$1 becomes
04-10-2013	Buy	-3.31	4.48
04-03-2013	Cash		4.63
03-05-2013	Buy	-1.73	4.63
03-05-2013	Cash		4.71
02-25-2013	Sell	-6.2	4.71
12-17-2012	Buy	3.56	5.02
12-13-2012	Cash		4.85
12-11-2012	Buy	-2.38	4.85
11-29-2012	Cash		4.97
11-07-2012	Sell	-2.68	4.97
11-01-2012	Cash		5.11
10-18-2012	Sell	7.74	5.11
10-15-2012	Cash		4.74
08-14-2012	Buy	-3.21	4.74
08-07-2012	Cash		4.9
08-02-2012	Sell	-10.49	4.9
07-26-2012	Buy	3.74	5.47
07-25-2012	Cash		5.27
07-25-2012	Buy	-0.97	5.27
07-18-2012	Cash		5.32
07-11-2012	Sell	-7.33	5.32
07-11-2012	Cash		5.74
06-29-2012	Buy	-4.38	5.74
06-29-2012	Cash		6
06-25-2012	Sell	-2.17	6
06-21-2012	Cash		6.13
06-20-2012	Buy	-6.73	6.13
06-14-2012	Cash		6.57
06-07-2012	Sell	3.5	6.57
06-05-2012	Cash		6.35
05-09-2012	Sell	18.83	6.35
05-06-2012	Cash		5.34
04-26-2012	Buy	-11.3	5.34
04-20-2012	Cash		6.02
04-19-2012	Sell	1.13	6.02
04-12-2012	Cash		5.95
04-10-2012	Sell	-2.67	5.95
04-04-2012	Cash		6.11
03-13-2012	Buy	3.58	6.11
03-08-2012	Cash		5.9
03-06-2012	Sell	-6.69	5.9
01-25-2012	Buy	16.13	6.32
12-27-2011	Cash		5.44
12-18-2011	Sell	-5.64	5.44
12-14-2011	Cash		5.77
12-02-2011	Buy	-8.4	5.77
11-11-2011	Cash		6.3
11-10-2011	Sell	-7.77	6.3
11-01-2011	Cash		6.83
10-27-2011	Buy	-3.83	6.83
10-20-2011	Cash		7.1
10-19-2011	Buy	-6.48	7.1
10-07-2011	Cash		7.59
10-05-2011	Buy	11.26	7.59
08-31-2011	Sell	10.78	6.82
08-31-2011	Cash		6.16
08-26-2011	Buy	8.23	6.16
08-23-2011	Cash		5.69
08-16-2011	Sell	14.77	5.69
08-11-2011	Cash		4.96
08-02-2011	Sell	29.88	4.96
07-27-2011	Cash		3.82
07-13-2011	Buy	1.21	3.82
07-12-2011	Cash		3.77
07-11-2011	Buy	-2.39	3.77
06-27-2011	Cash		3.86
06-22-2011	Sell	-2.39	3.86
06-21-2011	Buy	-1	3.95
05-31-2011	Cash		3.99
05-05-2011	Sell	0.84	3.99
03-24-2011	Buy	4.48	3.96
03-16-2011	Cash		3.79
03-15-2011	Buy	-1.62	3.79
03-08-2011	Sell	12.84	3.85
03-03-2011	Buy	-7.6	3.41
02-23-2011	Cash		3.69
02-01-2011	Buy	-3.66	3.69
01-31-2011	Sell	-8.34	3.83
01-20-2011	Cash		4.18
01-12-2011	Buy	3.76	4.18
12-10-2010	Cash		4.03
12-08-2010	Sell	-2.78	4.03
12-07-2010	Buy	-2.79	4.14
12-01-2010	Cash		4.26
11-16-2010	Sell	-8.07	4.26
09-01-2010	Buy	46.54	4.63
08-11-2010	Sell	12.07	3.16
07-07-2010	Cash		2.82
06-30-2010	Sell	-8.52	2.82
06-07-2010	Cash		3.08
05-25-2010	Buy	-1.74	3.08
04-28-2010	Sell	27.57	3.13
04-22-2010	Cash		2.45
04-19-2010	Sell	-2.99	2.45
03-01-2010	Buy	20.79	2.53
02-18-2010	Cash		2.09
01-27-2010	Sell	-1.04	2.09
01-07-2010	Cash		2.11
Earlier results

Timing Model profit/loss on TNA - 3x ETF Direxion Small Cap Bull (Russell 2000) - Annualized return March 2009 - April 2013: +33.96 % / year [100% long TNA on buy signal, 100% short TNA on sell signal, 100% cash on neutral signal]. This table is an excellent example of how choice of ETF is important. You will notice that TNA can have severe drawdowns, sometimes going through periods of outperformance or underperformance relative to the other 3-times ETFs that track the major averages such as NASDAQ and S&P 500. Its sharp gains and drawdowns are illustrative of this particular ETF and not of the Market Direction Model (MDM) itself in that we recommend ETFs with each change in signal to help guide our members. As one example, TECL (formerly TYH) and NASDAQ Composite had small gains as a result of the March 13, 2012 buy signal, but TNA had a loss. We did not recommend any Russell 2000 equivalent ETFs such as TNA on this March 13 buy signal.

Date	Signal	% gain / loss	$1 becomes
04-10-2013	Buy	-2.5	3.2
04-03-2013	Cash		3.28
03-05-2013	Buy	-3.36	3.28
03-05-2013	Cash		3.39
02-25-2013	Sell	-8.9	3.39
12-17-2012	Buy	23.27	3.72
12-13-2012	Cash		3.02
12-11-2012	Buy	-2.14	3.02
11-29-2012	Cash		3.09
11-07-2012	Sell	-2.47	3.09
11-01-2012	Cash		3.17
10-18-2012	Sell	4.33	3.17
10-15-2012	Cash		3.04
08-14-2012	Buy	7.85	3.04
08-07-2012	Cash		2.82
08-02-2012	Sell	-14.81	2.82
07-26-2012	Buy	-4.91	3.31
07-25-2012	Cash		3.48
07-25-2012	Buy	-1.88	3.48
07-18-2012	Cash		3.55
07-11-2012	Sell	-6.21	3.55
07-11-2012	Cash		3.78
06-29-2012	Buy	-1.04	3.78
06-29-2012	Cash		3.82
06-25-2012	Sell	-12.3	3.82
06-21-2012	Cash		4.36
06-20-2012	Buy	-7.41	4.36
06-14-2012	Cash		4.71
06-07-2012	Sell	-0.49	4.71
06-05-2012	Cash		4.73
05-09-2012	Sell	17.84	4.73
05-06-2012	Cash		4.01
04-26-2012	Buy	-8.12	4.01
04-20-2012	Cash		4.36
04-19-2012	Sell	-1.35	4.36
04-12-2012	Cash		4.42
04-10-2012	Sell	-8.54	4.42
04-04-2012	Cash		4.83
03-13-2012	Buy	-5.07	4.83
03-08-2012	Cash		5.09
03-06-2012	Sell	-6.67	5.09
01-25-2012	Buy	-1.58	5.45
12-27-2011	Cash		5.54
12-18-2011	Sell	-8.87	5.54
12-14-2011	Cash		6.08
12-02-2011	Buy	-11.23	6.08
11-11-2011	Cash		6.85
11-10-2011	Sell	-10.94	6.85
11-01-2011	Cash		7.69
10-27-2011	Buy	-7.05	7.69
10-20-2011	Cash		8.27
10-19-2011	Buy	-9.23	8.27
10-07-2011	Cash		9.11
10-05-2011	Buy	4.08	9.11
08-31-2011	Sell	31.22	8.75
08-31-2011	Cash		6.67
08-26-2011	Buy	14.79	6.67
08-23-2011	Cash		5.81
08-16-2011	Sell	12.36	5.81
08-11-2011	Cash		5.17
08-02-2011	Sell	42.46	5.17
07-27-2011	Cash		3.63
07-13-2011	Buy	-12.82	3.63
07-12-2011	Cash		4.16
07-11-2011	Buy	-2.84	4.16
06-27-2011	Cash		4.28
06-22-2011	Sell	-1.32	4.28
06-21-2011	Buy	-1	4.34
05-31-2011	Cash		4.38
05-05-2011	Sell	-6.77	4.38
03-24-2011	Buy	3.82	4.7
03-16-2011	Cash		4.53
03-15-2011	Buy	-1.49	4.53
03-08-2011	Sell	10.86	4.6
03-03-2011	Buy	-7	4.15
02-23-2011	Cash		4.46
02-01-2011	Buy	6.05	4.46
01-31-2011	Sell	-7.97	4.21
01-20-2011	Cash		4.57
01-12-2011	Buy	-3.08	4.57
12-10-2010	Cash		4.72
12-08-2010	Sell	-3.4	4.72
12-07-2010	Buy	-1.59	4.89
12-01-2010	Cash		4.96
11-16-2010	Sell	-14.86	4.96
09-01-2010	Buy	44.16	5.83
08-11-2010	Sell	6.17	4.04
07-07-2010	Cash		3.81
06-30-2010	Sell	1.08	3.81
06-07-2010	Cash		3.77
05-25-2010	Buy	-6.81	3.77
04-28-2010	Sell	31.21	4.04
04-22-2010	Cash		3.08
04-19-2010	Sell	-3.08	3.08
03-01-2010	Buy	35.53	3.18
02-18-2010	Cash		2.35
01-27-2010	Sell	-7.31	2.35
01-07-2010	Cash		2.53
Earlier results

Buy & Hold NASDAQ Composite (month-to-month) - Annualized return July 1974 - March 2013: +10.47 % / year

Date	% gain / loss	$1 becomes
03-29-2013	6.81	49.83*
02-28-2013	3.4	46.65
01-31-2013	1.41	45.12
12-31-2012	3.2	44.49
11-30-2012	0.31	43.11
10-31-2012	1.11	42.98
09-28-2012	-4.46	42.51
08-31-2012	1.61	44.49
07-31-2012	4.34	43.79
06-29-2012	0.15	41.97
Earlier results

*As of 05-17-2013 (intraday or end of day, depending)