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ON TRACK FOR TRIPLE DIGITS IN 2011: Market Direction Model continues to score big in its 21st year of real-time trading

Since the big downside break in the market which began with the model's sell signal issued on August 2, the model has made huge gains on www.selfishinvesting.com. This is in keeping with the model's long term track record.

It was up hugely in the years the market had big downside breaks using the NASDAQ Composite as benchmark with NO leverage such as:

1987 = +102.5% / Black Monday

1990 = +46.6% / Prelude to Gulf War

1997 = +62.6% / Asian contagion

1998 = +54.2% / Long Term Capital disaster

2000-2002 = +118.8% / Bursting of the dot-com bubble

2008 = +31.1% / Financial debt crisis

2010 = +25.8% / The flash crash

Returns would be roughly three times what is shown above had 3-times ETFs existed then. In fact, in 2010, the model's returns were indeed +86.5% using 3-times ETF TNA and +83.8% using 3-times ETF TYH.

How has the model done in 2011, a year of trendless volatility then a big downside break in August?

+258.6% using 2-times ETF TVIX

+83.5% using 3-times ETF TNA

+62.0% using 3-times ETF TYH

All reports are time-stamped so you can examine the exact time each signal was issued and thus the price of each ETF at the exact time: https://www.virtueofselfishinvesting.com/reports

Why has the model outperformed most all other market timing models?

1) The model is based on statistical analysis of price/volume action of the major indices and leading stocks going back more than 20 market cycles. This is nearly 100 years of data.

2) The model has a fail-safe built in so losses on false signals are typically less than 2% on a 1-times ETF while the gains made on true signals far outweigh the losses.

3) The model is not black box but is systematic. In other words, the experience Dr. Kacher brings to the model allows the model to account for material changes in the market environment. For example, quantitative easing that began in 2009 became a significant change in the price/volume action of major indices and leading stocks. Thus the model was able to account for this and thus manage to continue making stellar returns despite many market timing models getting thrown by quantitative easing and other challenges including high frequency trading.

4) The advent of 2-times and 3-times ETFs since 2009 has enabled the Dr K Market Direction Model to truly shine. While it's long term return going back to 1974 is over +33%/year using the NASDAQ Composite as the benchmark (1974-1990 is backtested, while 1991-present is real-time/under fire), 3-times ETFs that exist today mean the model is capable of generating, on average, close to 100% returns annually. It is well on track to generate yet another triple digit return in 2011. It managed a near triple digit return in 2010 (+86.5% with TNA, +83.8% with TYH), and a triple digit return in 2009 (+157.3% with TNA, 118.3% with TYH).

Feel free to stop by our site and if you have any questions, we are here to answer them.

http://www.selfishinvesting.com, run by two market timing pros with audited track records.

Published: 23 Sep 2011 00:44 ET
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