LOL!'s Market Timing Newsletter

[LOL!]

On May 8th, I wrote:

[…]
We won't know what happens off the right-hand side for a few hours.

Now we know: VNQ just kept going down in price:

I should have sold all shares when I sold some shares, but I didn't.

 

[utrecht]

For the record, I see the market getting a nice pop in the next 2-3 weeks. I predict SPY finally breaks above 212 and makes it to 217+

 

[Brat]

From your mouth to God's ear.. my YTD returns have flatlined.

 

[LOL!]

With an overweight to international I am beating my benchmark by 33%. And that's despite VNQ not being too cooperative here.

I feel like shorting VNQ when it goes up after selling.

I would welcome a nice pop anytime though.

 

[steelyman]

With an overweight to international I am beating my benchmark by 33%. And that's despite VNQ not being too cooperative here.

I feel like shorting VNQ when it goes up after selling.

I would welcome a nice pop anytime though.

My "benchmark" (at least, the top-level stock/bond split) is the Vanguard 2025 target fund. If I were to sell anything today (I won't till 2016), the international funds would agree with what you say.

 

[LOL!]

A great day in the market today with everything up. I noticed that my asset allocation in US equities is too high, so I decided to trim things back by exchanging from an S&P500 index fund to a Total US Bond index fund in my 401(k). The order for about 1% of portfolio value was submitted and will go through at today's closing prices.

utrecht got their wish with SPY above 212, too. Will momentum carry things higher?

The REIT index is having a good day, but is still not above where I last sold some shares on May 8. I need to unload some of them as well, but I will continue waiting and hope to get the price about 3% higher from here before selling.

 

[LOL!]

With VNQ (REIT index) going up this morning, I have submitted some limit orders to sell more shares of VNQ. My philosophy here is to not submit one big order, but to submit several smaller orders at higher and higher limit prices.

I've decided not to be greedy and will not try to get 3% higher from yesterday.

Update: VNQ up at this time about 1.2% today, so orders are being executed.

 

[utrecht]

I think we will continue higher and SPY will be at or above 217 by the end of May.

 

[aja8888]

With VNQ (REIT index) going up this morning, I have submitted some limit orders to sell more shares of VNQ. My philosophy here is to not submit one big order, but to submit several smaller orders at higher and higher limit prices.

I've decided not to be greedy and will not try to get 3% higher from yesterday.

Update: VNQ up at this time about 1.2% today, so orders are being executed.

Question, is your plan to unload VNQ based on the soft real estate market or the potential Fed increase in interest rates, or some other reason? Just curious as I hold a lot of VNQ also.

 

[LOL!]

^My plan to unload VNQ has nothing to do with any fundamentals. It is simply a trading vehicle for me based on what many folks might call technicals.

When VNQ drops a lot in one day, then I may buy it with the intent to sell after it goes up 2% to 3% within a week or so. If it doesn't go up, then I may sell it anyways. If it drops even further, then I may buy more with the intent to sell after it goes up 2% to 3% within a week or so. Rinse and repeat.

So I had purchased VNQ when it dropped to around 79 and below recently and have been selling in the 81-82 range.

Add to the above that I am still overweighted in US equities, but on the mid/small cap side of things. With my sale of the S&P500 fund shares yesterday, I cannot sell more US large-caps and maintain my asset allocation. Instead, I must sell US mid/small-caps and that points to selling VNQ as I no longer hold any mid/small-cap US funds in my tax-advantaged accounts.

Does any of the above make sense?

 

[aja8888]

^My plan to unload VNQ has nothing to do with any fundamentals. It is simply a trading vehicle for me based on what many folks might call technicals.

When VNQ drops a lot in one day, then I may buy it with the intent to sell after it goes up 2% to 3% within a week or so. If it doesn't go up, then I may sell it anyways. If it drops even further, then I may buy more with the intent to sell after it goes up 2% to 3% within a week or so. Rinse and repeat.

So I had purchased VNQ when it dropped to around 79 and below recently and have been selling in the 81-82 range.

Add to the above that I am still overweighted in US equities, but on the mid/small cap side of things. With my sale of the S&P500 fund shares yesterday, I cannot sell more US large-caps and maintain my asset allocation. Instead, I must sell US mid/small-caps and that points to selling VNQ as I no longer hold any mid/small-cap US funds in my tax-advantaged accounts.

Does any of the above make sense?

Yes, makes sense. Keep AA near where you want by selling small/midcap securities and VNQ fits that bill, plus day trade it a bit!

 

[LOL!]

I think VNQ is a favorite of day traders. One will note its high volume, low bid/ask spread, volatility, and extreme sensitivity to news about interest rates.

If there is a hint that there will be a delay in raising interest rates, then VNQ goes up. If there is a hint that rates will go up sooner, then VNQ tanks.

Also note that it appears (to me at least) that most of the day's action in VNQ happens before my lunchtime. That's not to say that things don't happen later in the day, but day traders do not like to hold any shares overnight.

 

[LOL!]

A slow day in the market, but I had to invest the cash raised from selling VNQ last Friday. Back into VCSH in a traditional IRA, but also bought some VSS (small-cap foreign) in a Roth because it had dropped a tiny bit and this was a Roth IRA that I want to be 100% equities. If VSS goes up even a little bit, I intend to sell in a traditional IRA the same amount of VSS that I just bought and will probably buy VCSH with the proceeds.

Asset allocation is now within my desired ranges, so I'm very comfortable at this point.

 

[steelyman]

Since I don't belong anywhere near this thread (investing style-wise), I will continue that tradition

I'm in the process of moving almost all mutual fund holdings in taxable accounts to individual stocks. I would like to cover all S&P sectors and am nearly there with the exception of two: financials and health care.

I'm thinking of Johnson & Johnson and Wells Fargo, they seem solid. I have nothing but disdain for "advice" from people like Carnival Barker Cramer. I'm guessing the feeling would be generally positive on those two but it never hurts to bounce the ideas off.

 

[LOL!]

Sorry, I can't help you pick individual stocks. I disdain them.

In other news, everything I bought yesterday has dropped a little bit today. Nevertheless, I used what little cash I had left to buy more VCSH.

If I need to buy something now, I will have to sell something first.

 

[NW-Bound]

What, nobody did any trading in nearly a month?

I am done with travel for now, so start to follow the market again and do some trading. I just went bearish on biotech and bullish on emerging markets, both with triple leveraged ETFs.

Will post about gain or loss when I close the positions.

 

[aja8888]

What, nobody did any trading in nearly a month?

I am done with travel for now, so start to follow the market again and do some trading. I just went bearish on biotech and bullish on emerging markets, both with triple leveraged ETFs.

Will post about gain or loss when I close the positions.

Added to my AAPL shares yesterday @$126.52. Somewhat of a core holding until it hits $150.

 

[utrecht]

What, nobody did any trading in nearly a month?

I am done with travel for now, so start to follow the market again and do some trading. I just went bearish on biotech and bullish on emerging markets, both with triple leveraged ETFs.

Will post about gain or loss when I close the positions.

Ive done quite a bit actually. Ive done some day trading but way too may trades to post.

Here are my other trades in the past month or so:

May5th..Sold weekly SPY 209 puts when SPY was at 209.82..They expired worthless for full profit

May12th..Sold weekly SPY 208.50 puts when SPY was at 209.30..They expired worthless for profit

May18th..Bought some LVS June 45/50 put spreads when LVS was at 50.85. LVS started rising. Sold at a $420 loss when LVS was at 52.22

May 26th..Bought some HD July 110/115 Call spreads when HD was at 111.34. Still holding this one. Its currently at 111 and Im even

May26th..Sold weekly SPY 210 puts when SPY was at 210.50..They expired worthless for full profit

June 4th..Sold weekly SPY 209 puts when SPY was at 209.93. They expired worthless for full profit

June8th..Sold some AAPL June 133c/121p strangles for .67 when AAPL was at 127.56. Full profit occurs if AAPL is between 121 and 133 next Friday. Trade looks good so far with AAPL at 129.

June 8th.Sold weekly SPY 207.50 puts when SPY was at 208.58. They expire on Friday. Trade looks good with SPY at 211.14

 

[LOL!]

I'm traveling, so no trades since the last posts. Yes, really.

 

[LOL!]

Just an update about one month after previous trades:
VNQ (REIT index) has dropped about 4% to 5% since selling.

The exchange of S&P500 to Total Bond is nothing special. It looked bad on Thursday, but with Friday's drop in the S&P500, the Total Bond fund has done very slight better than the S&P500 over the one-month time frame, though both have lost about 1%.

Here is a "growth of" chart of some asset classes reprsented by index funds for the last month:

 

[Brat]

I found this article interesting: Skin in the Game

 

[aja8888]

I found this article interesting: Skin in the Game

Interesting. Note his heavy personal allocations of Primecap Odyssey growth funds.

 

[LOL!]

It's Dan Wiener and even though he is older than us, he is still working. His advice must really suck, so scratch him off the list.

..., Wiener plans to be working for a very long time.

 

[aja8888]

It's Dan Wiener and even though he is older than us, he is still working. His advice must really suck, so scratch him off the list.

Yea, it sucks being old and not too sharp. At least he is an expert in Vanguard funds though.

 

[LOL!]

So I purchased a moment ago some shares of VEA (developed markets index). It had dropped 3% yesterday, was up 1% this morning, but has settled negative so far today. This is definitely a short-term trade, so if it goes up by a percent or so, then I intend to sell it or in another account its equivalent.

My previous trades of May had done nothing special until the Monday drop. Only then did it look like the move from S&P500 to bonds saved any money. The little bit of VSS that I bought has lost money. Nevertheless, I'm still ahead of my benchmarks for the year, so I won't complain too much.

I am surprised there hasn't been more trading mentioned in this thread now that the Greeks have stiffed their creditors finally. What is everybody else doing?