QQQQ Timing.

Timing methods of StockMarketMirror software can be successfully applied to generate very reliable timing signals for QQQ (ETF) symbol. The best way how to do it, is to create a data source, comprising all components of NASDAQ-100 and apply "Sophisticated market timing ... " on all stock symbols of NASDAQ- 100. It is useful to add QQQ symbol to the stock list of NASDAQ-100, in order to get the value of net compounded profit for QQQ symbol, corresponding to the calculated timing signals. The data source with NASDAQ-100 stock symbol list is already available in the software installation archive of StockMarketMirror, version 6.2. Add QQQ stock symbol on top of the stock list. Complete QQQ timing can be accomplished with a single mouse click, if automatic execution of "Sophisticated market timing ... " was selected via "PARAMS" command.

Use time frame about 250 trading days long for timing calculations. To get stable trading signals, it is useful to use fix starting day of the time frame. When the time frame becomes too long (more than 300 days), as trading days go by, move starting day forward.

Four timing methods (models) with various levels of sophistication are available in the StockMarketMirror software. You will frequently observe, that different timing methods (models) are giving different timing results. But the difference of results is not very "violent" and can be explained by the difference in the measure of sophistication, used in the mathematical models. The software is giving you clear instructions which method is the best to use - the sophisticated market timing method.

Another source of minor volatility of timing results is the mathematical method used for optimization of internal parameters. Monte Carlo method is used, which is based on the verification of timing model fitness with randomly selected values of internal parameters. This method has very good performance in spite of its random nature, which is causing small volatility of timing results, when timing calculations are repeated with the same data, the same parameters and the same timing method. Small, residual volatility, caused by Monte Carlo method has no impact on the performance of the StockMarketMirror software.

To verify timing performance of QQQ symbol in details, after timing calculations, delete all stock symbols from stock basket, put QQQ symbol into stock basket and run command for output of universal trading report, from "Tools 1" submenu. You will get results like this:

 

Average profit of rallies from the overall market (basket) timing. (Basket content = QQQQ)

Rally Num	Trading	Status	Profit Average Net of Rally [%]	Profit Compound [%]	Day Count of Rally	Buy Position of Rally	Sell Position of Rally	Buy Date of Rally	Sell Date of Rally	Stock Count	Commission OneWay [%]
1 L	Long	Closed	6.05	6.05	25	351	376	5/24/2004	6/30/2004	1	0.50
1 S	Short	Closed	12.84	19.67	31	407	376	8/13/2004	6/30/2004	1	0.50
2 L	Long	Closed	23.15	47.37	96	407	503	8/13/2004	12/30/2004	1	0.50
2 S	Short	Closed	5.43	55.37	38	541	503	2/24/2005	12/30/2004	1	0.50
3 L	Long	Closed	-0.57	54.49	9	541	550	2/24/2005	3/9/2005	1	0.50
3 S	Short	Closed	5.53	63.02	37	587	550	5/2/2005	3/9/2005	1	0.50
4 L	Long	Closed	6.75	74.03	36	587	623	5/2/2005	6/22/2005	1	0.50
4 S	Short	Closed	0.98	75.74	10	633	623	7/7/2005	6/22/2005	1	0.50
5 L	Long	Open	0.92	77.35	1	633	634	7/7/2005	7/8/2005	1	0.50

It is true, that NASDAQ-100 has number of components with higher trading performance than QQQ symbol, but QQQ symbol has very smooth and well "predictable" behavior with only small draw-downs, which is of great advantage. Using margin with your trading orders can increase trading performance of QQQ symbol in terms of profitability.

Following chart is corresponding to the table (above) of QQQ timing signals: