Sniper Market Timing Newsletter

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Wolfgang, founder

Market Timing in General

What are the mechanics of your market timing approach?

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.

S&P 500 is a registered trademark of Standard & Poor's Financial Services LLC.

So, a computerized market timing model is the way to go?

Market timing could sometimes be very dangerous. Many market timing models and strategies are not rigorously tested, are over-optimized and curve-fitted to historical data. But there are investment strategies which work across various financial markets and market types (i.e. bull markets, bear markets, and sideways markets).

We think that we have developed a unique and promising approach to market timing. So, if you are looking for a sound and sophisticated market timing model, this website is for you.

But we are not a "get rich quick"-scheme, and we do not offer any bogus "magic"-"mumbo jumbo"-"holy grail"-"dreamland"-"master of the universe"-system.

Do your market timing models ever make partial moves (e.g.: 50% investment)?

Our investment strategies are switching only between full investment (100% allocation) and no investment (0% allocation).

How many times a year will your trading systems switch a signal?

It varies. In a typical year, only 2-6 signals per trading system will be issued.

Are your market timing strategies optimized?

During the development of our market timing strategies, it was not our objective to find the parameter values which generated the maximum profit on historical data (=back testing), because there is a tradeoff between the maximum profit and the robustness of a market timing model. Generally, the less a market timing strategy has been optimized, the more robust it will be in the future because every optimization includes the risk of equity curve fitting. The robustness of a market timing model is determined by the ability to generate market timing results in the future close to the results of the backtest.

So, our objective was to design robust and stable market timing models. Therefore, we searched for a specific range of parameter values, within which the profits and other criteria's (e.g.: drawdowns) would be acceptable. These parameter values are settled in the center of the flattest parameter space. So, a minor market shift will not result in dramatic and negative equity shifts.

Do you guarantee results better than buy-and-hold?

No investment strategy can ensure results better than buy-and-hold, nor guarantee an investment against loss in declining markets.

But does market timing work?

Market timing is not a crystal ball, and it certainly will not make you a successful trader or market timer. Even if your market timing models are well constructed, they have been and will be incorrect in many cases, because markets are social systems and are not physical systems, where input A and input B always gives you output C. There is no holy grail and no perfection - only percentages of perfection.

So, most of you are familiar with the concept of buying stocks and bonds and prefer a "Buy and Hold"-approach. We think that buying and holding works for many people, because of the long term positive bias of stock markets. But sometimes this concept gets dangerous:

- Emotions (fear and greed) will undermine the required discipline.
- A "Buy and Hold"-strategy can underperform for extended periods (e.g. US stock market: 1929-1954 (no inflation-adjustment); Japanese stock market: 1989-?).
- The financial markets are mirroring the battle between fear and greed, and therefore they are NOT following a random walk.

Consequently, we decided:
- To discipline our self by using a computerized and unbiased approach for investing.
- To "time" the market to avoid long periods of under-performance.
- To use sophisticated computer-based models to discover trends in the fat-tailed distributions of the returns of financial markets.

So, the key to successful market timing is to use a 100% mechanical market timing strategy and model that completely removes emotions and subjectivity from the investing process. Objectively applying the rules and strategies of your market timing models most times will keep you out of trouble. But you also must have a money management system and the trader's self-discipline.

No one can time the market - not even the experts.

Maybe you are right. We do not have the ultimate answer to your comment. And yes, a passive strategy like a "Buy and Hold"-approach works for many people. But we think that human beings are producing tradeable pattern and traces in the markets - and we do not think that the market is a random walk. So, our goal is to detect these patterns and to trade them. But we are only dealing with probabilities and once again: maybe you are right, and we will miss the boat completely.

What currency is the base currency for your international market signals including US market timing signals?

We are issuing our market timing signals based on local stock benchmark indices "priced" in local currencies (e.g. US markets "priced" in US dollars, Canadian markets in Canadian dollars, UK markets in British pounds and so on).

How do I get notified about signal changes of your market timing models?

For our newsletter, our market timing models are run weekly (every weekend), and if a new market timing signal is generated, we send out an email to all active subscribers of our email newsletter.

How often do we receive your market timing signals and risk ratings info?

Our market timing newsletter is sent to our subscribers via email every week.

Can you please explain how I should use your market timing signals to profit?

Our website and newsletter have been prepared solely for informational purposes and are not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading or market timing strategy. The investments and the market timing signals discussed on our website and in our newsletter may be unsuitable for investors depending on their specific investment objectives and financial position. So, it is not our intention to provide individual investment advice. There are Registered Investment Advisors providing professional investment management services.

Do you sell your strategies?

We do not sell our market timing systems and algorithms.

Stock Market Timing

Does your market timing model work on individual stocks?

Our stock market timing models trade primarily stock market indices, but our back-testing is always performed also on individual stocks of global benchmark stock indices.

Do you have a list which iShares©-MSCI©-ETFs could be traded with your signals?

Before we could answer your question, we have to inform you that our website and newsletter have been prepared solely for informational purposes and are not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading or market timing strategy. So, it is not our intention to provide individual investment advice. There are Registered Investment Advisors providing professional investment management services. No endorsement of any third-party products or services is expressed or implied by any information, material or content referred to or included on, or linked from or to our web site and our newsletter.

List of iShares© for tracking our stock market timing strategies:

Australian stocks MSCI© Australia Fund (EWA) Austrian stocks MSCI© Austria Fund (EWO)
Belgium stocks MSCI© Belgium Fund (EWK) Brazilian stocks MSCI© Brazil Fund (EWZ)
Canadian stocks MSCI© Canada Fund (EWC) Chinese stocks China Large-Cap Fund (FXI)
French stocks MSCI© France Fund (EWQ) German stocks MSCI© Germany Fund (EWG)
Hong Kong stocks MSCI© Hong Kong Fund (EWH) Italian stocks MSCI© Italy Fund (EWI)
Japanese stocks MSCI© Japan Fund (EWJ) Malaysian stocks MSCI© Malaysia Fund (EWM)
Mexican stocks MSCI© Mexico Fund (EWW) Dutch stocks MSCI© Netherlands Fund (EWN)
Singaporean stocks MSCI© Singapore Fund (EWS) South African stocks MSCI© South Africa Fund (EZA)
South Korean stocks MSCI© South Korea Fund (EWY) Spanish stocks MSCI© Spain Fund (EWP)
Swedish stocks MSCI© Sweden Fund (EWD) Swiss stocks MSCI© Switzerland Fund (EWL)
Taiwanese stocks MSCI© Taiwan Fund (EWT) British stocks MSCI© U.K. Fund (EWU)
US stocks MSCI© S&P 500© Fund (IVV) European stocks S&P Europe 350© Fund (IEV)
Latin American stocks S&P Latin America 40© Fund (ILF)

S&P 500, S&P Europe 350, and S&P Latin America 40 are registered trademarks of Standard & Poor's Financial Services LLC.
iShares is a registered trademark of BlackRock Inc.
MSCI is a registered trademark of MSCI Inc.

Bond Market Timing

Which US bonds do you trade? 10 year, 30 year or high yield?

We have normalized all bond systems internally for system development purposes with "continuous" 10 year government bonds with a par yield of 6%. For our own trading, we are using mainly respective bond ETFs for 10+ year government bonds.

Do you rate Central European bond markets?

At the moment we do not issue market timing signals for Central European bond markets because of missing benchmark indices and trading instruments.

Currently, we are tracking these government bond markets:

Hong Kong
New Zealand
South Korea

Stock Market Risk Ratings

Could your stock risk ratings reach a level when it would be indicating an imminent stock market crash?

Our stock market risk ratings indicate the potential risk of stock market investments on a percentage basis. So, our stock market risk scores do not signal any imminent stock market crash.

Sniper Market Timing is providing this website and its information for guidance and information purposes only. The information contained herein has been compiled from sources deemed reliable, and it is accurate to the best of our knowledge and belief; however, Sniper Market Timing cannot assure as to its accuracy, completeness, and validity and cannot be held liable for any errors or omissions. All information contained herein should be independently verified and confirmed. Sniper Market Timing does not accept any liability for any loss or damage howsoever caused in reliance upon such information. Reader agrees to indemnify and hold harmless Sniper Market Timing from and against any damages, costs, and expenses, including any fees, potentially resulting from the application of any of the information provided by Sniper Market Timing. The Sniper timing system has not been applied over a significant period in real trading. Recommendations made in the future may or may not equal or better the performance of the Sniper timing system as simulated by historical backtesting.
The analysis, ratings and/or recommendations made by made Sniper Market Timing, and/or any of its suppliers do not provide, imply, or otherwise constitute an assurance of performance. Past actual or simulated performance is no guarantee of future results. Therefore, it should not be assumed that future results will be positive or will equal past performance, real, indicated or implied. No assurance is offered by Sniper Market Timing regarding the accuracy, market predictive powers, suitability or effectiveness (either expressed or implied) of any of the information provided. This website has been prepared solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to purchase or sell any security or instrument or to participate in any trading strategy. The trading instruments and the trading signals discussed on this website may be unsuitable for investors depending on their specific objectives and financial position. The price or value of the trading instruments to which this website relates, either directly or indirectly, may fall or rise against the interest of investors. Any market exposure always entails the possibility of substantial loss of equity. Reader agrees to assume all risk resulting from the application of any of the information provided by Sniper Market Timing.
Additionally, to usual risks embedded with investing, international trading may involve the risk of capital loss due to fluctuation in currency values, from differences in accounting principles, or from economic and/or political instability in foreign countries. Any commercial realization of the information provided by this website without written permission from Sniper Market Timing is strictly forbidden. Trademarks and copyrights mentioned on this website are the ownership of their respective companies. The names of products and services presented are used only in an educational fashion and to the benefit of the trademark and copyright owner, with no intention of infringing on trademarks or copyrights. Sniper Market Timing and/or its principals may purchase or sell any of the securities cited on this website.