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Strategies & Market Trends : Fidelity Select Sector funds -- Ignore unavailable to you. Want to Upgrade?

To: Jim Battaglia who wrote (4313)	3/22/2002 10:52:35 PM
From: Julius Wong	Read Replies (1) \| Respond to of 4916

Jim: The timing model is an attempt to quantify the market condition. The timing model gives a number (TMN) between 0 and 10. A higher TMN corresponds to a better market. It may be used as a reference for allocation of investment funds. A low TMN suggests more allocation to MM fund or cash. The TMNs are calculated based on mathematics, statistics, dynamics, and optimization. Artificial filters are introduced to reduce oscillations. However, if the market moves in some strange ways which are not expected in the design of the filters, the filters may backfire. The timing model number itself is a little fuzzy. For example, 6.0 may be about the same as 6.5 or 5.5. However, the trend of the numbers is important. If the number moves down, say from 7.0 to 6.5, to 6.0, and to 5.5, then the market is declining. The timing model is constructed based on sampling of data derived from the major indexes, the stock distribution deviation from the Gaussian distribution (deviation from the bell curve) in the 52 week range, and the changes of indexes and stock distribution. TC2000 does the basic calculations, then the results are exported to a spreadsheet for the final calculation. Julius