Market Timing the 35 Indices/ETFs for
Investors and Traders

The Markets I Use for Market Timing and Investing:

This may show you how much more you need to be aware of to do market timing properly. Within my key 35 markets are markets that are critical for market timing, such as the U.S. dollar index, oil, banking, REITs, and housing. Those are the markets that upset the others when any one of them is troubled. It's a HUGE mistake not to follow these. I explain why just below the list, so please read on. You may learn a lot from simply looking through this list.

Major US Markets
  • Dow Jones Industrials
  • SP-500
  • NASDAQ 100 (QQQQ)
  • NASDAQ Composite Index
  • SP Midcap 400
  • Russell 2000
  • Russell 2000 Growth
  • Russell 2000 Value

  • 10 year Treas. Note
  • 30 year Treas. Bond
  • Corporate Bonds
  • Junk Bonds

US Sectors:
  • Amex Biotech
  • Amex Pharma
  • Amex Gold Bugs
  • Amex Oil
  • Natural Gas Stocks
  • Oil Service
  • DJ Transports
  • Utility Index (Philly)

Banking/Real Estate:
  • BKX (KBW Banking)
  • US Housing

Foreign Markets
  • Australia
  • Canada
  • China
  • Europe
  • Hang Seng
  • India
  • Japanese Nikkei 225
  • Emerging Markets

U.S. Dollar Index

  • CRB (Commodity Research Bureau Index)
  • Gold
  • Light Sweet Crude Oil


Why We Follow These Indices

Stock market trading and investing and market timing must include technical analysis of all the major markets, especially those that affect the market as a whole. I follow not only the standard U.S. Market Indices that are of crucial importance to investors and traders, but also many important sectors. These are sectors that will allow you to diversify your holdings to encompass major industries including biotechnology, drug companies, gold mining companies, energy companies, transportation companies, and utilities.

Market timing ETFs while ignoring major financial markets such as bonds is a big mistake. I cover the four bond indices show above.

The major culprits of the 2008-2009 market decline including banking, REITs (Real Estate Investment Trusts), and housing are also covered.

Market timing ETFs in the U.S. would be impossible without following critical foreign stock markets. So the increasingly important Chinese and Emerging Markets are tracked daily. The Japanese market is important in market capitalization as well. It's best to follow Europe separately as the 2010 correction due to Greece's financial woes showed you and me.

Why follow the U.S. dollar index? What does the US dollar have to do with market timing the overall stock market? It is important to educate all investors who are not tuned into currency fluctuations to start paying attention.

The U.S. stock markets are strongly influenced by movements of the U.S. dollar index, which is an index of important currencies and their relationship with the dollar. These currencies include the Euro, the Yen, the British Pound, the Canadian Dollar, the Swedish Krona, and the Swiss Franc. The correlation positive or negative with the US dollar must be tracked over time. That is what we do through market timing the dollar. The trend since the March 2009 lows has been dollar down, stock market up and vice versa. This may not hold up forever and we'll be there to point that out.

Gold is an important inflation hedge as ALL governments attempt to pour liquidity into their financial systems and degrade their currencies. The standard recommendation of many advisors is to have 5-10% of your liquid net worth in gold (but consult with your advisor on this and come to your own decision).

Why not follow silver and other metals? They have value that correlates with the stock markets to a great degree. Have you ever held silver while the stock market was tanking? If you did, you lost money. Look at the silver chart during the stock market crater of 2008-2009. Silver cratered with the stock markets.

Silver has industrial uses and is not a pure anti-fiat currency play. Gold is much better insurance against currency issues. It is true that in times of extreme crisis, silver will respond well and can go up much faster and percentage-wise higher than gold, but in between in the quieter times, silver can be far riskier than gold.

Oil is another critical cost to the economy. Our Arab and other foreign suppliers are aware that if they raise oil prices too high, they will choke off the goose that lays their golden egg, the U.S. economy. They seem to think that $80 a barrel is a good number. Oddly enough (or maybe not so oddly!) that is where oil ended up as of March 2010. If it moves much higher, the U.S. economy will suffer and so will the rest of the world as the U.S. consumer is constrained by high energy costs. I simply have to follow the price of oil or I'll have the same fate as Al Pacino's character says in "Scent of A Woman," "I'm flying blind here!" I like flying with my eyes open. So I have to attend to all the critical indices to win and to help you to do the same.

Commodities trading in oil, gold, and in commodities in general without knowing how the respective indices are trending via technical analysis is truly flying blind. All investors should consider having some exposure to commodities, more while the trend is UP and less when it is DOWN.

The point of this page is to educate investors. You can't just follow a couple of stocks and know what is happening in the markets. You cannot just follow 4 indices. That is why I follow 35. We've got a full set of inputs just as an ICU doctor who follows not only the blood pressure and pulse, but also the temperature, respiration rate, CO2 and oxygen levels, etc. You get the point. You need to understand the patient from a global point of view and for the markets that means following the entire Universe of investments as reflected by these key indices.

The great thing is that you will gain an intuitive feel for how to do what I do as you follow this newsletter. I am not about dependency. I learned this stuff through the generosity of others over the years. They shared what they knew with me. I am giving all that back and more through this newsletter. Give much more than you get is my credo. I'll prove that to you by my actions.

This page is extremely powerful if you have heard my message. Get a feel for how markets are interdependent and together provide a global view of where we are headed and you will be far more successful as an investor and as a trader. Market timing is a great tool, but you need to know WHAT to time!

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