Clark's Gate Timing System©
Did you get out of the market in time in 2008? If you did not, you probably lost 30-40% on your investments, in your retirement and pension funds. We can talk all day about the greed of investment bankers (and mortgage lenders) on both Wall Street and Main Street which tore the heart out of America (and demolished the Global Economy probably for the next generation). The simple fact is: you need to take care of your own investment decisions because professionals will always put a rose-colored picture on the markets. They make money from keeping their clients investing (which generally means being in long positions in stocks). They have a vested interest in keeping you in the market. Our long-term trading system gave a sell signal on the S&P 500 Index on 12/3/07 and gave a short-sell sign on the same index on 2/11/08. If you had been subscribing to our service, you would not have suffered such a catastrophic 2008 on your investments.

What does CGTS© offer the subscriber? We offer two levels of participation: 1) a form of ÔPortfolio InsuranceÕ, through which we provide a Ôshadow systemÕ for your investment decisions. 2) An active trading service whereby we give you buy-sell and shortsell-cover signals for the issues we are following in our own database. You can read more about these two services below.
Clark's Gate Timing
System©
Clark's
Gate Timing System (CGTS©) is a market timing system designed to trade stocks,
indexes, and mutual funds on a relatively short-term basis (3 to 30 weeks). The
system is based on technical indicators we have created over a fifteen-year
period. These indicators are designed to trigger buy and sell signals based on
fixed overbought and oversold levels. The system is also designed to be used in
all markets, both long and short. We believe that there is no market from which
we cannot profit. Each buy signal has as its inverse a short-sell signal; each
sell signal has as its inverse a cover signal. Our intention is to be in the
market at all times (or nearly at all times), and to use the natural rhythms of
the markets to our own advantage -- and to the advantage of our subscribers.
Our view is that one must be courageous enough to short the markets when they
are bearish; and that one also must be courageous enough to sell into a rally;
otherwise profits will slip away under the guise of self-delusive fantasies of
outrageous gains. The key to beating the markets is being willing to sell
stocks even against your own (better) judgment.
Rule #1: Never go against the trend. The majority is often wrong; but the minority is often wrong also.
Rule #2: You donÕt need a broker who makes his living off of your money. Most brokerage firms buy a position in a stock quietly and slowly. When the stock has appreciated significantly they add the stock to their buy recommendations. Then they begin selling their position while they are encouraging their clients to buy the stock. Most firms never issue sell recommendations. If they do, beware: they are probably trying to buy your stock after a huge sell-off.
Rule #3: When fear turns to greed and visions of unlimited wealth, we are probably near a top in a trade and we should get ready to sell.
Rule #4: When hope and denial turns to fear and visions of an unlimited loss, we are probably approaching a bottom in a trade. (See Rule #1 however.)
Rule #5: Trade with a system however, to complement your gut reactions. Follow the system no matter what, even if it means taking a loss. DonÕt get lazy with your money and sink into denial. Use a system.
PART ONE: TECHNICAL INDICATORS
We have developed a whole stable of proprietary technical indicators that we use to initiate and monitor positions in the markets. For the purposes of this web page we are going to try to keep things simple.
All of our indicators fall under two main headings: (1) trend indicators; and (2) momentum indicators. Trend indicators are generalized indicators used to show us the general direction of an issue or the markets over different periods of time: (1) short-term; (2) intermediate-term; and (3) long-term. The trend-indicators, generally speaking, are not good trading indicators as they tend to be self-correcting and, ultimately, perfect at calling tops and bottoms – that is, they are always re-adjusting themselves to give an accurate reading of the markets. (It is possible to manipulate these trend indicators – as averages, for instance – to make them more useful as trading indicators, as we will explain further.)
Momentum indicators are, generally speaking, our actual trading indicators. The momentum indicators signal overbought and oversold magnitudes; while the trend indicators give market background or ÔenvironmentalÕ readings.
In a very general sense, we buy an issue when the momentum indicator is oversold but the long-term trends are positive; we short-sell an issue when the momentum indicator is overbought and the long-term trends are negative.
A. TREND INDICATORS
Note that the direction of the trend (up or down) is important; note also that the pattern of the trend matters: bull markets are usually accompanied by higher lows and higher highs in the trend patterns; bear markets are defined by lowers lows and lower highs. An issue that fails to make a new high in a bull market move may be experiencing exhaustion; a declining issue in a bear market move that establishes a higher low in its pattern may be running out of sellers.
(1) Short-Term Trend:

(2) Intermediate-Term Trend:

-
(3) Long-Term Trend:

-
As I have indicated, these trends, generally speaking, are background indicators. They ÔproclaimÕ the current direction of the market and ÔsuggestÕ a future direction. These trend indicators are not infallible, obviously; they can turn on a dime, and give a ÔlateÕ reading when they do turn – that is, they can give you a positive reading today, and correct that reading the next day back to an actual top that occurred the week before. So they cannot be used, by themselves, as a trading trigger. Also, as I have written, the directions of the trends tell us one thing; but the pattern of the trends also tell us alot, especially the pattern of the shorter-term trends. Combined reading of shorter- and longer-term trends can tell us alot about the turning point of trends, and the health, generally, of a market move in eiteher direction.
Anyone who has invested for long knows that no one who invests has a perfect record. We consider a 70-80% success rate a target for our system. We discard trading systems that do not fall into this range. Even more than an 80% success rate, however, we look for a profit vs loss success rate closer to 90%. That is, trading the Scudder Gold and Silver Stock mutual fund with one of our trading tools, we had 32 total trades, 22 winner and 10 losers, for a success rate of 68.75%. However those 22 winning trades netted gains of more than 41 points, while losing trades cost us a negative 3.10 points total – giving us a profit over loss percentage of 92.97%. This type of return is our goal.
B. MOMENTUM INDICATORS:
As I wrote earlier, we have generated many, many momentum indicators. We will introduced only a few to try to keep this slightly arcane subject focused. Also we will look only at our ÔbestÕ indicators. Remember, we donÕt view these momentum indicators in a vacuum, but in the context of the trend indicators we have already discussed.
A. M4 Momentum Indicator: This momentum indicator is a bit strange in that it works in the inverse of what one might expect. M4 shows an ÔoverboughtÕ reading when the indicator is low (less than 5); and M4 shows an ÔoversoldÕ reading when the indicator is high (more than 95). This is a very short-term momentum indicator and a short-term trading indicator. It is really not very good at calling bottoms or tops, because it tends to call both too early. But that doesn't mean it is not a good trading indicator however.

B. M2F MOMENTUM: This indicator is an intermediate-term momentum indicator that registers an overbought condition above 70 and an oversold condition below 30. It is not very exact as a trading instrument since it can become overbought (or oversold) early and remain so for an extended move. It is useful, however, when used with other momentum indicators, as ÔdoubleÕ trading triggers. It can also be used as a short-term trading indicator giving a buy reading when all the trends are positive and M2F is oversold and getting out as soon as M2F becomes oversold. We will look at this more below.

C. M2F/M4 COMBINATION. If M4 and M2F are good momentum indicators working alone, then how do they work combined and averaged? The chart below shows how this indicator does give fairly good readings of tops and bottoms – but see below to see how we use this indicator as a trading trigger.

D. M4 TB (Top and Bottom) Indicator. This indicator gives us pretty reliable readings for tops and bottoms of an issues life cycle.

E. M4 Sum Plus. This is a modification of the M4 Momentum indicator (above), which disregards all but extreme movements in the indicator. This has proven to be our most successful trading indicator. When the indicator moves above zero, this is positive; when it moves below zero, this is a negative.

You will note that we use these trend and momentum indicators together (sometimes mixing and matching them into strange combinations) to create our trading systems.
F. M5 Momentum. This indicator began as a very long-term momentum indicator that we shortened more and more until it also became a very good short-term trading indicator. We show several M5Õs with different durations in the chart below. These shorter duration modifications have helped our M5 become our best short-term trading instruments. Generally speaking with M5, +100 is overbought and -100 is oversold.

PART TWO: TRADING
SYSTEMS
Keeping it simple.
We have developed many
trading systems over the years. We
have learned that keeping it simple is the best way to focus our energy and
time. We work with one short term
trading system, one intermediate-term trading system; and one long-term trading
system – three systems in all.
The first two trading systems work with variations of the M5 indicator,
shown above (F); and the third works with the M4 Sum Plus indicator shown above
(E).
1. Short-Term Trading System #1 – M5
(10) Short-Term
This trading system is
design for active short-term trading, with trading times generally between 2-7
trading periods (days or weeks).
This trading system gives a
buy signal when todayÕs M5 (10) is less than zero but rising and when the two
longer term trends are positive.
We sell when M5 (10) is greater than 100 and declining. We short when M5 (10) is greater than
zero and declining; and the two longer trends are negative; and we cover when
M5 (10) is less than -100 and advancing.

Historical Trading
Test
Range: 6/12/01 to 5/5/09
Net
P&L:
88.34
Percent Net
P&L:
433.65%
Number of
Trades:
64
Average
P&L per Trade:
1.38
Percent
Winning Trades:
100.00%
Total Days in
Test:
1985
Percent Days
in Market:
31.74%
Average
P&L per Day:
0.04
Max
Drawdown:
2.09
Reward/Risk
Ratio:
42.266
Buy & Hold
P&L:
-0.74
vs. B&H
P&L:
89.08
vs. B&H
Percent P&L:
437.29%
vs. B&H
Reward/Risk Ratio: 42.302
Current
Position:
Flat
Open Trade
P&L:
0.00
Traded Last
Day:
No
10 dates at
the beginning of this quote file were excluded from the test range because this
trading model requires 10 data points before the first value can be calculated.
Entry
Exit
# Type Bars Date Date P&L Pts P&L % Reason for Exit
____ _____ ____
________ ________ ___________ ________ _______________
1 Short 3 07/03/01
07/09/01 +1.94 +10.11 Exit Short Rule
2 Short 10 08/02/01
08/16/01 +2.77 +13.68 Exit Short Rule
3 Short 7 08/28/01
09/07/01 +2.73 +15.97 Exit Short Rule
4 Long 5 09/28/01
10/05/01 +2.76 +22.66 Exit Long Rule
5 Long 9 11/23/01
12/06/01 +2.20 +11.23 Exit Long Rule
6 Short 5 12/07/01
12/14/01 +1.77 +8.36 Exit Short Rule
7 Short 17 01/11/02
02/06/02 +1.60 +7.92 Exit Short Rule
8 Short 21 03/11/02
04/10/02 +1.87 +10.73 Exit Short Rule
9 Short 4 04/18/02
04/24/02 +1.01 +6.54 Exit Short Rule
10 Short 10 05/20/02
06/04/02 +0.50 +3.02 Exit Short Rule
11 Short 4 07/18/02
07/24/02 +1.25 +8.72 Exit Short Rule
12 Long 7 08/06/02
08/15/02 +2.29 +18.97 Exit Long Rule
13 Short 8 08/22/02
09/04/02 +1.83 +12.12 Exit Short Rule
14 Long 12 10/09/02
10/25/02 +2.55 +27.63 Exit Long Rule
15 Long 4 10/30/02
11/05/02 +1.78 +16.32 Exit Long Rule
16 Long 5 12/31/02
01/08/03 +1.34 +10.23 Exit Long Rule
17 Long 7 02/10/03
02/20/03 +1.11 +8.44 Exit Long Rule
18 Long 4 03/13/03
03/19/03 +0.80 +5.96 Exit Long Rule
19 Long 20 03/25/03
04/23/03 +0.61 +4.45 Exit Long Rule
20 Long 7 05/22/03
06/03/03 +1.09 +6.85 Exit Long Rule
21 Long 10 06/25/03
07/10/03 +1.44 +8.54 Exit Long Rule
22 Long 7 07/18/03
07/29/03 +1.27 +7.10 Exit Long Rule
23 Long 20 08/07/03
09/05/03 +2.89 +16.49 Exit Long Rule
24 Long 27 09/26/03
11/04/03 +1.62 +8.12 Exit Long Rule
25 Long 7 11/20/03
12/02/03 +1.17 +5.33 Exit Long Rule
26 Short 9 01/20/04
02/02/04 +2.66 +9.22 Exit Short Rule
27 Short 8 04/06/04
04/19/04 +1.79 +7.26 Exit Short Rule
28 Short 4 04/27/04
05/03/04 +1.82 +7.93 Exit Short Rule
29 Short 11 09/13/04
09/28/04 +2.18 +10.77 Exit Short Rule
30 Short 13 10/07/04
10/26/04 +1.02 +5.33 Exit Short Rule
31 Short 21 11/01/04
12/01/04 +0.11 +0.57 Exit Short Rule
32 Short 20 12/07/04
01/05/05 +1.16 +5.88 Exit Short Rule
33 Short 29 03/08/05
04/19/05 +0.94 +5.19 Exit Short Rule
34
Short 4 07/20/05 07/26/05 +1.06 +5.27 Exit Short Rule
35 Short 4 08/05/05
08/11/05 +1.24 +6.42 Exit Short Rule
36 Short 15 09/07/05
09/28/05 +0.48 +2.61 Exit Short Rule
37 Long 9 10/21/05
11/03/05
+0.48
+2.82 Exit Long Rule
38 Long 38 11/11/05
01/09/06 +1.59 +9.10 Exit Long Rule
39 Long 12 01/24/06
02/09/06 +1.22 +6.66 Exit Long Rule
40 Long 3
08/07/06 08/10/06
+2.15
+12.35 Exit Long Rule
41 Long 4 09/08/06
09/14/06 +0.95 +4.37 Exit Long Rule
42 Long 5 11/28/06
12/05/06 +0.01 +0.04 Exit Long Rule
43 Long 6 12/26/06
01/05/07 +1.28 +4.71 Exit Long Rule
44 Long 13 03/05/07
03/22/07 +0.91 +3.57 Exit Long Rule
45 Long 14 03/28/07
04/18/07 +1.17 +4.55 Exit Long Rule
46 Long 15 05/11/07
06/04/07 +0.38 +1.43 Exit Long Rule
47 Long 6 06/08/07
06/18/07 +0.73 +2.76 Exit Long Rule
48 Long 7 07/31/07
08/09/07 +2.49 +8.61 Exit Long Rule
49 Long 7 08/17/07
08/28/07 +0.42 +1.40 Exit Long Rule
50 Long 3 09/17/07
09/20/07 +0.71 +2.25 Exit Long Rule
51 Long 23 10/05/07
11/07/07 +0.10 +0.31 Exit Long Rule
52 Short 3 11/07/07
11/12/07 +3.64 +11.11 Exit Short Rule
53 Short 11 12/14/07
01/02/08 +2.11 +7.36 Exit Short Rule
54 Short 4 02/14/08
02/21/08 +0.34 +1.44 Exit Short Rule
55 Short 9 06/06/08
06/19/08 +1.02 +3.84 Exit Short Rule
56 Short 13 08/18/08
09/05/08 +2.23 +9.11 Exit Short Rule
57 Short 6 09/22/08
09/30/08 +0.55 +2.38 Exit Short Rule
58 Short 4 10/21/08
10/27/08 +1.77 +9.91 Exit Short Rule
59 Short 6 11/05/08
11/13/08 +0.13 +0.75 Exit Short Rule
60 Short 6 01/07/09
01/15/09 +1.51 +8.72 Exit Short Rule
61 Short 3 01/29/09
02/03/09 +0.31 +1.95 Exit Short Rule
62 Short 6 02/09/09
02/18/09 +1.43 +8.49 Exit Short Rule
63 Long 4 03/10/09
03/16/09 +0.81 +5.57 Exit Long Rule
64 Long 12 04/08/09
04/27/09 +1.24 +7.24 Exit Long Rule
2. Intermediate-Term Trading: M5 (20).
This trading system is
design for active intermediate-term trading, with trading times generally
between 15-25 trading periods (days or weeks).
This trading system gives a buy
signal when todayÕs M5 (20) is less than zero but rising and when the two
longer term trends are positive.
We sell when M5 (20) is greater than 100 and declining. We short when M5 (20) is greater than
zero and declining; and the two longer trends are negative; and we cover when
M5 (20) is less than -100 and advancing.

Historical Trading (Daily
Data):
Test
Range: 1/31/01 to 5/5/09
Net
P&L:
282.42
Percent Net
P&L:
2,612.56%
Number of
Trades: 51
Average
P&L per Trade:
5.54
Percent
Winning Trades:
98.04%
Total Days in
Test:
2075
Percent Days
in Market:
29.93%
Average
P&L per Day:
0.14
Max
Drawdown: 13.41
Reward/Risk
Ratio:
21.060
Buy & Hold
P&L:
121.90
vs. B&H
P&L:
160.52
vs. B&H
Percent P&L:
1,484.90%
vs. B&H
Reward/Risk Ratio: 20.058
Current
Position: Flat
Open Trade
P&L:
0.00
Traded Last
Day:
No
20 dates at
the beginning of this quote file were excluded from the test range because this
trading model requires 20 data points before the first value can be calculated.
Entry
Exit
# Type Bars Date Date P&L Pts P&L % Reason for Exit
____ _____ ____
________ ________ ___________ ________ _______________
1 Long 3 03/02/01
03/07/01 +1.00 +10.39 Exit Long Rule
2 Long 9 03/13/01
03/26/01 +1.11 +11.35 Exit Long Rule
3 Long 8 04/09/01
04/20/01 +2.25 +21.91 Exit Long Rule
4 Short 19 05/03/01
05/31/01 +2.51 +20.07 Exit Short Rule
5 Short 10 06/26/01
07/11/01 +0.61 +5.09 Exit Short Rule
6 Long 8 10/04/01
10/16/01 +1.07 +13.41 Exit Long Rule
7 Long 13 12/17/01 01/07/02 +1.14 +11.06 Exit Long Rule
8 Long 38 02/22/02
04/18/02 +1.34 +11.74 Exit Long Rule
9 Short 7 04/18/02
04/29/02 +0.72 +5.71 Exit Short Rule
10 Short 14 05/16/02
06/06/02 +1.53 +12.10 Exit Short Rule
11 Short 7 08/23/02
09/04/02 +0.62 +7.95 Exit Short Rule
12 Short 12 09/24/02
10/10/02 +0.27 +3.62 Exit Short Rule
13 Short 20 11/07/02
12/06/02 +0.53 +6.56 Exit Short Rule
14 Short 11 01/07/03
01/23/03 +0.34 +4.58 Exit Short Rule
15 Short 29 01/30/03
03/13/03 -0.20 -2.79 Exit Short Rule
16 Short 9 03/20/03
04/02/03 +0.16 +2.08 Exit Short Rule
17 Long 12 04/21/03
05/07/03 +2.25 +34.32 Exit Long Rule
18 Long 9 06/10/03
06/23/03 +0.94 +10.94 Exit Long Rule
19 Long 11 08/07/03
08/22/03 +0.47 +4.77 Exit Long Rule
20 Long 13 09/26/03
10/15/03 +2.06 +19.96 Exit Long Rule
21 Long 6 12/23/03
01/02/04 +0.74 +7.42 Exit Long Rule
22 Long 6 02/05/04
02/13/04 +0.29 +2.59
Exit Long Rule
23 Long 5 02/24/04
03/02/04 +0.72 +6.48 Exit Long Rule
24 Long 18 05/03/04
05/27/04 +1.05 +8.06 Exit Long Rule
25 Long 32 07/14/04
08/27/04 +2.39 +16.13 Exit Long Rule
26 Long 13 12/22/04
01/11/05 +0.41 +1.27 Exit Long Rule
27 Long 21 03/10/05
04/11/05 +2.09 +5.25 Exit Long Rule
28 Long 8 05/13/05
05/25/05 +5.01 +14.41 Exit Long Rule
29 Long 21 06/15/05
07/15/05 +4.42 +11.90 Exit Long Rule
30 Long 10 10/11/05
10/25/05 +4.51 +8.74 Exit Long Rule
31 Short 15 01/17/06
02/07/06 +17.11 +20.20 Exit Short Rule
32 Short 11 02/24/06
03/13/06 +5.78 +8.09 Exit Short Rule
33 Short 8 05/09/06
05/19/06 +6.52 +9.18 Exit Short Rule
34 Long 4 07/17/06
07/21/06 +8.35 +15.94 Exit Long Rule
35 Long 6 10/12/06
10/20/06 +4.69 +6.23 Exit Long Rule
36 Long 7 12/29/06
01/11/07 +10.96 +12.92 Exit Long Rule
37 Long 8 02/12/07
02/23/07 +4.19 +4.94 Exit Long Rule
38 Long 9 04/16/07
04/27/07
+8.49
+9.29 Exit Long Rule
39 Long 7 06/27/07
07/09/07 +8.44 +6.92 Exit Long Rule
40 Long 12 08/17/07
09/05/07 +14.70 +12.04 Exit Long Rule
41 Long
18 11/13/07 12/10/07 +24.25 +14.27 Exit Long Rule
42 Short 6 12/31/07
01/09/08 +18.68 +9.43 Exit Short Rule
43 Long 15 02/27/08
03/19/08 +6.71 +5.46 Exit Long Rule
44 Short 22 05/14/08
06/16/08 +9.42 +5.06 Exit Short Rule
45 Short 10 07/09/08
07/23/08 +7.99 +4.59 Exit Short Rule
46 Short 18 08/15/08
09/11/08 +23.09 +13.14 Exit Short Rule
47 Short 12 10/31/08
11/18/08 +17.68 +16.43 Exit Short Rule
48 Short 10 12/11/08
12/26/08 +9.19 +9.67 Exit Short Rule
49 Short 8 01/06/09
01/16/09 +10.69 +11.49 Exit Short Rule
50 Long 6 01/21/09
01/29/09 +10.17 +12.28 Exit Long Rule
51 Long 7 03/10/09
03/19/09 +12.99 +14.66 Exit Long Rule
3. Long-Term trading
System – M4 Sum Plus Long-Term
Using the M4 Sum Plus
indicator, we go long when M4 Sum Plus is -1 and when our Long-Term Trend is
positive. We go short when M4 Sum
Plus is +1 and our Long-Term Trend is negative.

Historical
Trading (Daily Issue):
Test
Range: 1/10/01 to 3/5/09
Net
P&L:
341.74
Percent Net
P&L: 4,127.29%
Number of
Trades:
11
Average
P&L per Trade:
31.07
Percent
Winning Trades:
90.91%
Total Days in
Test:
2047
Percent Days
in Market:
98.93%
Average P&L
per Day:
0.17
Max
Drawdown:
78.59
Reward/Risk
Ratio:
4.348
Buy & Hold
P&L:
80.56
vs. B&H
P&L:
261.18
vs. B&H
Percent P&L:
3,154.35%
vs. B&H
Reward/Risk Ratio: 3.686
Current
Position:
Long
Open Trade
P&L:
-5.69
Traded Last
Day:
No
Entry
Exit
# Type Bars Date Date P&L Pts P&L % Reason for Exit
____ _____ ____
________ ________ ___________ ________ _______________
1 Long 81 02/09/01
06/07/01 +1.27 +13.28 Exit Long Rule
2 Short 96 06/07/01
10/29/01 +2.02 +18.61 Exit Short Rule
3 Long 131 10/29/01
05/08/02 +3.37 +38.23 Exit Long Rule
4 Short 239
05/08/02 04/21/03
+5.62
+46.08 Exit Short
Rule
5 Long 691 04/21/03
01/17/06 +78.14 +1,189.35 Exit Long Rule
6 Short 141
01/17/06 08/08/06
+19.93
+23.53 Exit Short
Rule
7 Long 381 08/08/06
02/13/08 +64.62 +99.75 Exit Long Rule
8 Short 15 02/13/08
03/06/08 +8.47 +6.55 Exit Short Rule
9 Long 49 03/06/08
05/15/08 +68.80 +56.89 Exit Long Rule
10 Short 189
05/15/08 02/17/09
+95.20
+50.18 Exit Short
Rule
11 Long 12 02/17/09
03/05/09 -5.69 -6.02 Open
I am
interested in working with private investment firms as a market timing and
trading consultant. Anyone
interested in discussing this should feel free to contact me at the email
address below.
PART FOUR: WHO AM I?
I am a one-person firm operating independently and providing information to subscribers as a journalistic enterprise. I am a retired academic administrator who is also a novelist, a poet, and a fine artist.
Samples of my work are available at the following web sites:
Fine Arts: http://www.hoalantrangallery.com/MJC2.htm
Literature (Writing Samples): http://www.hoalantrangallery.com/MJCwriting.htm
Some readers might enjoy reading my most recent literary work: Turn Out The Lights, which is a philosophical treatise on the metaphysical causes of the Great Depression of 2008.
http://www.hoalantrangallery.com/Turnoutlights.htm
Michael J. Clark, Proprietor
Clark's Gate Timing System
Eugene, Oregon 97403
Last modified: 4 March 2009