The Tasgall Group

I feel like most people don’t give weekly charts their proper respect. Take a look at the daily and the weekly charts for the NDX. While many people will look for various moving averages or other technical indicators to show trend and direction of price, sometimes it just pays to simply zoom out to the weekly chart.

In the case of the NDX’s daily and weekly charts, it seems like the weekly chart smoothes out a lot of the daily noise, but it still captures the entire range for the week in its high and low marks. It also shows nicely that the trading ranges each week are fairly wide, and only in a few specific weeks did we really have strong movement significantly beyond the previous week’s trading range. (more…)

A topic that I played around with extensively over the weekend is trading sector ETFs on a small scale.? Now I know the general guidance is to avoid trading sector ETFs since there’s a great deal of market forces unbeknownst to many when you get into sector trading.? The general guidance is to stick to major classifications, like large-cap, mid-cap, small-cap, etc. since it’s too risky trying to time buying and selling sectors.? While it’s true that the risk is greater trading sectors, I think there’s a higher chance for profit as well and ETFs present an attractive medium for trading sector ETFs.

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Yes, Virginia, you can time the markets. It begs more careful research but this is an interesting read for the more passive investor. You have to be careful about ever-changing cycles and transaction costs etc. but I like the idea that this is based not just on observed correlations but on a logical explanation for the occurance of this correlation.

I was visiting my commercial mail drop today to collect my mail.? All my mail is sent there and all my accounts show that address as my home address.? Nowhere is my name linked to my home address except in the records of utility companies, something I couldn’t avoid easily (though it is possible).? As I was leaving the maildrop, the proprietor informed me that a Durham County Sheriff had come in looking to serve me with papers.? (more…)

With my current >90% exposure in equities, I’m feeling that I’ll be one of the first victims of a bear market.? With the recent minor run-up in the US equity markets, I’m thinking that the time is ripe to move at least a 10% chunk of my US equity exposure out and into either a money market account (like the VMMXX with it’s 5% yield) or into Bonds.? I’m becoming increasingly alarmed at the market conditions now and I’m interested in moving my main holdings out into cash in stages and allow my dollar-cost-averaging approach to continue on with my current asset allocation plan.

What are your thoughts?

I’m thinking that if the market continues to show strength throughout the day, I probably will move 5 – 10% of my Large and Mid-cap US equity positions.? I’m feeling very much exposed on these fronts.? Areas I’m probably not going to touch for now are my Small-cap, Foreign and Energy holdings.? Small-cap has already had a tough year and I’m probably going to keep those relatively untouched for now.? My international holdings are all up around 8 – 10% YTD and showing no clear signs of pulling back at the moment, so I’m planning on leaving these untouched for now.? I still feel that Energy has plenty of upside and I’ll continue to hold these funds for the foreseeable future.

Let me know if you think my concerns are unwarranted or you think I need to lay out my case for why Large and Mid-cap equities are heading for a significant drawndown in the future.

As individual investors, we have a unique advantage that most institutional investors don’t have… the ability to staand aside when the market is not favorable. That means either not trading, or getting out of your buy-and-hold investments and moving to cash or cash equivalent investments. (more…)

One area that I’ve always thought was under-represented was closed-end funds (CEFs). Most people know mutual funds and invest in them, primarily because they can buy mutual funds without incurring commissions (a pretty good reason when you’re investing with every paycheck). (more…)

I commented a while back on the fact that we need more asset classes when defining our asset allocations. A lot of people think that it’s enough just to divide your investments between stocks and bonds. I think the world has come a long way since the original research was done when those were the only two classes of investment.

I’d include the following asset classes in my allocation strategies:

• US Stocks
• US Bonds
• International Stocks
• Inetrnational Bonds
• Real Estate or REITs
• Commodities
• Gold and Precious Metals
• Timber
• Cash

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I named this post because of the Peter Principle, which essentially states what the link says it states.? I was reminded of the mention in Running Money of the fund managers who, when they reached a goal for rate of return,?took windfall profits and sat on them so as not to miss their targets for the month.? So my question is, should an investor call it quits during a given timeframe if they hit a good run and, if so, when and for how long? (more…)

There can be (or should be) a distinction between “setup” for a trade, and the “entry” signal for a trade. For example, with our PowerRatings, having a high rating might not be the only criteria for entry… instead, you may want to consider a high rating a “setup”, and then wait for a entry signal (e.g., the price moving in your favor) before plunging into a position.

This could be accomplished several ways, and should be tested before using (after all, maybe this extra step causes you to lose money). One way would be to watch the shares at open, and only go long if they’ve already started an upside move. Another way would be to place a stop buy order just above the close of the prior day — if the price goes down, your stop buy never gets filled;if it goes up, you get filled, though you may face more slippage with a stop order. (more…)