Timing the Market
Portfolio123 Timing Models

Systems for timing the market are generally driven by the price and volume action of the market. This includes not only Dow Theory type systems, but many of the breadth and sentiment systems as well. The timing systems from Portfolio123 are an exception.

Two systems are offered. One is based on the Fed risk model (described in detail on both the StockScreen123 and Portfolio123 sites) and the other is based on the direction of the Current Year EPS of the S&P 500. The signals for the systems are updated on a weekly basis.

The good news is the risk and EPS systems are available on both sites. The bad news is that they are only available in the fee-based version of these stock screeners.

In the table below, the performance results of the Portfolio123 EPS system and the gains that would have resulted following it compared to the gains possible following a 10 week / 40 week SMA crossover or buy and hold are shown.

For the period October 6, 2001 through October 15, 2010, the EPS and Crossover system results are based on going to cash when the model signaled adverse market conditions.

Basis of EPS Market Timing system

The basis of their system is that the market will be favorable when the EPS is rising and adverse otherwise. The effect on performance is reflected in the table above as well as every strategy I have tested on their system.

If timing the market is something you are considering this may be worth the look. Unlike a black box timing system you would buy from a system vendor, the workings of this timer are open to you. And the modest fee to use StockScreen123 is probably not much different than the fee you would pay for a timing system.

To take a look requires signing up for a 30 day free trial (if you sign up from this site you will get an extra 15 days in your free trial). If you do not have much experience with stock screening, my suggestion is the StockScreen123 screener. If you are more experienced, the learning curve for the more sophisticated Portfolio123 screener will not be as steep.

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