MONEY SAVVY WEEKEND : Savvy Confidential: A Briefing for Investors : Market Timer Rings Sell Bell for Stocks

Fabian Investment Resources, a stock-market timing newsletter followed by thousands of individual investors, flashed a “sell” signal this week for domestic stock mutual funds.

“It’s time to stand aside and wait for a new buying opportunity,” said Editor Doug Fabian, who issued the alert to subscribers Tuesday. “Our indicators point to lower stock prices ahead. Most investors should view this change in direction as a signal to raise cash by dumping under-performing funds.”

Fabian’s timing system is based on technical market indicators and was developed by his father in 1977.

The Huntington Beach-based newsletter’s system has a history of correctly calling market downtrends. On Oct. 15, 1987, the system urged a “switch” into money market funds, thus avoiding the “Black Monday” crash on Oct. 19.

But no timing system is perfect. Sometimes investors get whipsawed by selling out near market bottoms, then buying back in at higher prices.

Still, “There’s a benefit being a trend follower, and that’s avoiding significant market declines” by exiting the market when the trend turns negative, Fabian said.

He blamed the stock market’s current slump on worries about a possible interest rate hike, weakness of the dollar, year-2000 computer concerns and other factors.

Many market timing systems typically recommend selling when major stock market indexes pull back between 5% and 10% from their recent peaks.