Timing attempts to provide market equivalent returns over the long term, with a substantial reduction in variability of returns. The two components of the Timing program are EZ+Macro and Fear/Greed. This system trades rarely and splits its allocations between ETFs tracking the S&P 500, the intermediate-term U.S. Treasuries, and cash.

Information is as of the close on March 20, 2008.

EZ+Macro

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EZ Trend is now down.

Macro Trend is bullish for Treasuries. This comes into play only if the EZ Trend is not up.

Fear/Greed

The Fear/Greed model signaled a buy for the U.S. stock market in early November, and a sell in December, as the $VIX relative to actual volatility fell to a historically low level. For most of the last three months, the current level of sentiment, as measured by the $VIX relative to actual volatility, has been at levels historically associated with complacency. In the scale of the chart, 80% of the readings since 1990 have been between the red and green lines.

Model Allocation

Based on beginning with a $100,000 portfolio at inception.

S&P 500 SPDRs (SPY) - 24.5%
iShares 7-10 Year Treasury Bond Fund (IEF) - 25.5%
Cash - 50.0%

Returns

Based on beginning with a $100,000 portfolio at inception.

Equity: $97,972.86
Gain, Last 4 weeks: 0.54%
Gain, Year to Date: -3.32%
Gain, Since Inception: -2.03%

These returns include the recent February distribution from IEF of $0.28 per share, and SPY of $0.64 per share.

Changes To Model Allocation

There are no changes to the model allocation since this previous message. It is listed below:

S&P 500 SPDRs (SPY) - 25.0%
iShares 7-10 Year Treasury Bond Fund (IEF) - 25.0%
Cash - 50.0%

Tracking

There are no changes to track.

Commentary

My intuition is that the U.S. stock market has set up for an intermediate-to-long-term bottom, as discussed earlier in the week, but the Timing system is mechanical, and will be tracked based on the signals it generates.