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                                                               MIPS
                             
                                     STOCK MARKET TIMING SERVICES

   

MIPS is a stock market timing model that signals its members at the end of the day when the market (as measured by the S&P500) has changed direction from up-to-down or down-to-up (Signal Date).  The individual investor trades on this signal (long or short or out) on the opening of the market on the following day (Trade Date).  Members then simply keep the position that they acquired on the trade date until the next Signal email from MIPS.  It really is that simple.

MIPS Trading Profiles
When trading with MIPS, investors are "guided" on:

   (1) which stock market trading model use,
   (2) which stock market trading strategy to use (buy/hold, buy/short, etc), and
   (3) which equities (or ETFs) to trade.


TRADING FREQUENCIES FOR INDIVIDUAL INVESTORS
Stock market trading can be VERY complex or very simply depending on how investors elect to trade. At MIPS, we stay in the low-to-medium frequency trading range, and leave high frequency trading to the pros.  Timing models that do venture into higher frequency trading usually create more work for their clients and get chewed up by the pros. As can be seen in the table below, the MIPS models fit into the trading profiles on the left side.


 


                                                                                  

MIPS MARKET TRADING MODELS



AVERAGE TRADING FREQUENCIES FOR THE MIPS MODES

 
The MIPS models were designed and developed to be a medium frequency stock market trading model with a buy/short/cash strategy, trading ETFs.

MIPS4/MF+
Our "flagship" model is MIPS4/MF+,
which is a slightly faster trading model than MIPS3/MF (average of 15 trades/year)
- MIPS4 is an offshoot of MIPS3, but uses algorithms from all MIPS models
- MIPS4 is more "predictive" than the other MIPS models
- MIPS4's results are also very "smooth".

For this reason, we feel comfortable using the MIPS4/MF+ signals to trade leveraged ETFs 
- if you do use leverage, however, we recommend double leverage long, but single leverage short

- for example, you can trade 50% each of SPY and SSO on long signals (essentially 1.5x SPY), and 100% SH on short signals

MIPS3/MF
Our "Core" model, MIPS3/MF was introduced to the public in Nov. 2005.  The "core" algorithms in MIPS3/MF include applied mathematics, pattern recognition, artificial intelligence (self correcting), and common sense to identify changes in direction in the market (Inflexion Points) and possibly a new intermediate-term trend (hence our name Market Inflexion Point Signals or MIPS).  This model  trades an "average" of 12-15 trades/year, but with a range of 5-20 trades/year in any given year.  The "core" algorithms in MIPS3/MF are in all of the other MIPS models, except MIPS1/VLF.

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We recommend using MIPS4/MF+ trading ETFs on the next day's open, but MIPS3/MF if you must trade traditional mutual funds on the nest day's close.  However, we realize that there are many investors who do not want to  (or can't) trade as often as medium-frequency model require.  So, we offer other models that would be more appealing to these investors. Our two other models are (a) the low-frequency trading model (MIPS2/LF) whick trades about 5-6 times/year, and (b) the very-low-frequency trading model (MIPS1/VLF) which trades an avenge of about only once a year.  See below...

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MIPS2/LF
Our low-frequency stock market trading model was developed for investors who does not want to (or can't) make over 5-6 trades/year. MIPS2/LF trades an average of 6 trades/year (but occasionally can trade 2 times in any one month). When coupling MIPS2/LF with a buy/short strategy, it will produce really good results, but not quite as good as MIPS3 or MIPS4. Over time, the MIPS2/LF low frequency trading service should produce results that are at least 65% as good as the MIPS3/LF model, with only 1/3 as many trades.


MIPS1/VLF
-
Not highly recommended, but much better than a buy/hold strategy...
Our very-low-frequency stock market trading model was developed for the long-term investor who wants to trade only the long-term cycles in the stock market, and hence trade an average of 1 time per year! Obviously, this model cannot produce results as good as the other MIPS models, but it can still beat the buy/hold strategy over long periods of time (see the "Studies I and II" under the "Performance" tab).
*Using Inverse ETFs not recommended with the MIPS1/VLF model.
Even without "shorting", MIPS1/VLF with buy/sell beat SPY buy/hold in the 8 year period of 2003-10 to the tune of +102 vs +43, respectively (see "Study IV"). 

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WHAT TO TRADE

About 70-80% of the effort in making money in the stock market is in determining whether "the market" is "trending" up or down. In MIPS terminology, by "the market, we mean S&P 500 Index (which accounts for about 85% of the money in the New York stock exchange). Almost everyone makes money in a up market and vice-versa for a down market. 

The MIPS models determine "the market trend" for us with an accuracy of about 65-70%. In addition, the gains from MIPS's winning trades are about 3 times bigger than the losses from losing trades.
 

Viable Trading Strategies Include:
MIPS works well trading the S&P 500 ETF (SPY) and most stocks or indices ETF that "correlates" well with the SPY. 
Most small-cap, mid-cap and large-cap US indices are well-correlated to the SPY (like the Russell 2000, the Nasdaq 100, etc).  In general, even though these other indices track well with the SPY, their "volatility" is higher than that of the SPY (goes higher than the SPY in up markets and goes lower in down markets). Of course, this is great on MIPS' winning calls, but it is not good on losing calls.   Correlates => http://www.investopedia.com/terms/c/correlation.asp

For more aggressive investors, we recommend 1.5 leverage SPY on long signals and 1.0x SPY on short signals. One can do this by trading 50% each of SPY and SSO on long signals and 100% SH on short signals.  See below...


Click here for a full definiton of "Shorting" or "Going Short"...


                                   "Inverse Funds"   http://www.investopedia.com/terms/i/inverse-etf.asp
 

Strategic and Higher-Frequency Trading
Active traders can see more aggressive trading strategies by chicking below
- hedgeing; trading double/tripple leverage; trading high monementum stocks;
  trading hottest SP500 sectors; trading options, futures, etc.

  Click here  ==> Aggressive Trading



 

Sample Buy/Short/Cash "Signal" from the MIPS Models 
Sample MIPS Signal email:




Click here for what you do on a "Signal Change"
=>
http://mipstiming.com/signals_action


 




 

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MIPS Timing Systems
P.O. Box 691047
Houston, TX  77269

An affordable and efficient stock market timing tool. Contact MIPS
281-251-MIPS (6477)
E-mail: support@mipstiming.com