Les Masonson book was very interesting. Fortunately he posts the results of his analysis on his blog which is most fortunate for us. Check it out here http://www.buydonthold.com/author/Les/ . As of January 13, 2012 his Dashboard indicator is at +3 which is in the buy range.
Mr. Masonson made the following comment in his blog "With a continued Dashboard reading of “3”and with all major averages above their respective 200-dmas, we may finally be in an up trending market. However, news from the euro-zone or unexpected bad domestic economic news can stall this current rally at any time."
Partly based on this suggestion I moved about 6% of our 401k funds back into the market. Honestly, I just can't stand not participating in the upward movements of the markets.
Mr. Masonson uses the abbreviation 200-dmas. He is referring to the 200 day moving averages.
Thursday, January 19, 2012
Markets are flat this morning. We notched up our buy orders by $0.50. S&P closed above 1,300 yesterday which is bullish. But, the horrors of Europe still linger. Greece will be defaulting any day. Although this event is include in the market Psyche already, I still believe it will impact the markets.
Yesterday was no fun. We were 100% in cash and the market closed up approximately 100 points. I am still skeptical. We will keep our powder dry and see what happens.
I am reading a book by Les Masonson about when to enter and exit the market using various indicators. He definitely does not believe in buy and hold. I guess Jack Bogle, Warren Buffet, and Benjamin Graham are sighing in disbelief. I will let you know what I think about it.
Yesterday was no fun. We were 100% in cash and the market closed up approximately 100 points. I am still skeptical. We will keep our powder dry and see what happens.
I am reading a book by Les Masonson about when to enter and exit the market using various indicators. He definitely does not believe in buy and hold. I guess Jack Bogle, Warren Buffet, and Benjamin Graham are sighing in disbelief. I will let you know what I think about it.
Tuesday, January 17, 2012
We made a few bucks today. All of our sell orders were executed as the markets moved up in the morning. The markets gave up most of their gains closing up only 60 points this afternoon. This pattern has been consistent of late. The markets move up in the morning only to give back their gains in the afternoon. So, it's important to have your trades in place before the markets open.
Remember we are still bumping up against the 12,500 point range. I anticipate the markets will move lower soon. My purchase orders are in place. I hope yours are too.
Remember we are still bumping up against the 12,500 point range. I anticipate the markets will move lower soon. My purchase orders are in place. I hope yours are too.
Dow futures are up 91 points this morning. We feel comfortable increasing our sell prices on the positions that we purchased last Friday. Last Friday, we started something new in our simple investment strategy. When the market begins to fall, we purchased a double position for our first trade. Frequently, we are only able to make one trade when the market initially falls. The market will go down 75 - 100 points and then bounce back up. By purchasing a double position on our first trade as the market begins to fall, we are able to double our profits on that first trade.
Yes, I realize that in any investment strategy there are always losses. But, in our simple system we normally don't realize losses. We just hold our positions until we hit our profit targets. The only time we vary on this point is when we have invested all of our capital and the markets have fallen to a new trading range which normally is about 1,500 points, which is quite rate. But, if this does happen, and it did once last year, we had to take a few losses in order to increase our capital for trading purposes. The strategy worked well. We made our money back quickly as we rode the market up and down within the new, lower trading range.
Yes, I realize that in any investment strategy there are always losses. But, in our simple system we normally don't realize losses. We just hold our positions until we hit our profit targets. The only time we vary on this point is when we have invested all of our capital and the markets have fallen to a new trading range which normally is about 1,500 points, which is quite rate. But, if this does happen, and it did once last year, we had to take a few losses in order to increase our capital for trading purposes. The strategy worked well. We made our money back quickly as we rode the market up and down within the new, lower trading range.
Monday, January 16, 2012
Market volatility is the new mantra of finance. Buy and hold forever has been the financial mantra ever since Benjamin Graham's book Intelligent Investor was published. However, we have decided that market volatility is going to be with us for many years to come. Our choice was to follow the crowd by buying stocks via dollar cost averaging holding them forever and watching our investments torn asunder almost daily. Or find a better way.
Our financial ship turned to a new course in October 2011. No longer were we going to buy and hold. We chose to embrace the voracity of the market's volatility. If the market was going to go up one day and down the next, we were going to play the game accordingly.
The key was Electronically Traded Funds (ETFs). To the benefit of individual investors, we could trade ETFs frequently, even daily, without incurring transaction costs. We selected broad ETFs recommended by many of the financial gurus in the market today like Vanguard's Total Stock Market Index (VTI).
Our system is simple. Every time the ETF goes down by $0.50 we purchase 50 shares using limit orders. As it continues to fall, we continue acquiring 50 shares at $0.50 intervals. As soon as our orders are settled, we input sell orders at $0.50 above our cost for the particular trade, again using limit orders.
So, let the markets continue to be volatile. Every time the markets fall we acquire shares. When the markets turn around, and it always does, we sell shares.
Our financial ship turned to a new course in October 2011. No longer were we going to buy and hold. We chose to embrace the voracity of the market's volatility. If the market was going to go up one day and down the next, we were going to play the game accordingly.
The key was Electronically Traded Funds (ETFs). To the benefit of individual investors, we could trade ETFs frequently, even daily, without incurring transaction costs. We selected broad ETFs recommended by many of the financial gurus in the market today like Vanguard's Total Stock Market Index (VTI).
Our system is simple. Every time the ETF goes down by $0.50 we purchase 50 shares using limit orders. As it continues to fall, we continue acquiring 50 shares at $0.50 intervals. As soon as our orders are settled, we input sell orders at $0.50 above our cost for the particular trade, again using limit orders.
So, let the markets continue to be volatile. Every time the markets fall we acquire shares. When the markets turn around, and it always does, we sell shares.
Financial moves for Tuesday, January 16, 2012. The European markets closed up on Monday, January 15, 2012 which is contrast with what I thought they would do in light of the recent S&P downgrades for several of the European countries. Currently, the DOW futures market is up about 21 points. CNBC did a news piece today about a Golden Cross technical pattern whereby the 50 Day moving average for the S&P 500 has crossed its 200 Day moving average. They suggested that this was very bullish for the market and that within 6 weeks the market should move up about 6%.
I am not sure if that is true or not but I do feel there is an upward bias in the market. But, I also know that the DOW has been range bound between 11,500 and 12,500 for the last several weeks. We are currently at the upper end of that range. The markets went down last Friday bumping up against the range upper limit.
I acquired a few positions last Friday when the DOW was down approximately 160 points. It ended down only 48 points which meant that I had profits in the positions that I had acquired. Tonight I will enter sell orders in at 2% above my purchase price.
If I am wrong and the markets continue to fall, I currently have buy orders in at reasonable intervals. So, up or down, we are positioned to take advantage of the markets volatility.
I am not sure if that is true or not but I do feel there is an upward bias in the market. But, I also know that the DOW has been range bound between 11,500 and 12,500 for the last several weeks. We are currently at the upper end of that range. The markets went down last Friday bumping up against the range upper limit.
I acquired a few positions last Friday when the DOW was down approximately 160 points. It ended down only 48 points which meant that I had profits in the positions that I had acquired. Tonight I will enter sell orders in at 2% above my purchase price.
If I am wrong and the markets continue to fall, I currently have buy orders in at reasonable intervals. So, up or down, we are positioned to take advantage of the markets volatility.
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