Our market timing models are proprietary computer-based systems that detect changes in the direction of stock and bond markets.
Each market-timing model consists of different subsystems. These subsystems incorporate mainly pattern-recognition techniques based on the prices of the underlying markets (e.g.: US stock market timing model for the S&P 500 index) and on some risk rating-based indicators. The main emphasis during the development of our market timing strategy has been on robust patterns, which should work in different market phases (backtests to 1871) and on their edge against random investment-strategies.
Our market timing models are 100% mechanical and are based on mathematical algorithms. The formulas are proprietary and are therefore not disclosed.
Each week we scan bond and stock markets to generate entries and exits. Based on the current and historical market conditions our market timing models will generate a BUY- or a SELL-signal. These signals are based on proprietary quantitative models. Once a market timing signal has been issued, it remains in effect until a new signal invalidates it. When our model issues a BUY-signal, it means it is time to buy the underlying market. When the market timing signal becomes a SELL-signal, it is time to sell (but not short selling) the underlying market and to move the money in cash until a clear direction is determined by our system.