LOL!'s Market Timing Newsletter

With all the no-commission trade deals I am cleaning up various accounts that have had free trades in the past, then had commissions (so I stopped making trades and never paid a commission), then are back to free trades. Also with total US bond index funds down quite a bit this morning, but short-term corporate bond index not so much, I sold all shares of VCSH (short-term corporate bond index) that I possess and bought BND (total US bond index) with the money. Also I sold all shares of AGG (total US bond index) and bought BND with the money.

Basically, this is a bit of housekeeping, but the sums are significant, so I felt I had to report the trades. 360.
 
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Yesterday's trade has been unprofitable. Oh, well.

I continue this morning in simplifying anyways. I've submitted a limit order to buy more BND this morning with some cash I held back from selling VCSH yesterday to go along with the cash received overnight for unloading the fractional shares that arose from dividend reinvestment back into the ETFs

I'm using a limit order because I have enough cash to buy XXX.98 shares at the current price, but I should be able to get XXX+1 shares at a slightly lower price which is what my limit is set at. In this way I can use all remaining cash except for a few cents left in the sweep account.
 
Just earlier this week, so many of my covered calls got in-the-money, and looked to be exercised. That would have brought down my stock AA closer to the 50% that I targeted.

Then, the stocks stumbled, and as the options expired today, only a few lots will get assigned, and I still have these shares. The same thing happened last month. It's OK, as I will look to sell more call options on them soon.

The option premium I get for this month is enough for us and the children and son-in-law to go to Hawaii for a week. So, I guess that is plenty good.

I need to stay active with my option selling in the last 2 months of this year, if I want to repeat last year's 6-figure profit from option premium.
 
It's been awhile since any transactions, but I've been out of town and am about to go again on vacation. I've noticed that things went up while I was away and I've hit a rebalancing trigger and an all-time high portfolio value.

With bond ETFs down the last couple of days and SPSM (US small-cap) up today while US large-caps are down, I decided to sell shares of SPSM and buy more BND this morning to get back closer to my desired asset allocation.

I have no other trades planned since this is a move to preserve AA and not a short term trade. 957
 
Last week, after the Fed said they were done with rate cuts for a while, I decided to sell BND at 84.25, as the prospect of further price gain is gone.

BND is now at 83.68. I may buy back at 83.50.

Short-term trading BND makes so little money, because it does not move much. But, every few hundred bucks adds to the total return, and I do not pass up any chance to pick up a bit here and there.

PS. Just bought back some at 83.70. Will buy more if it drops a bit more.
 
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Bought some more at 83.57. I am now having back all the shares I sold at 84.25. Not a lot of money gained, but it is still better than nothing.

BND is at 83.42 as of this writing. I was too eager to buy back. Darn! :)
 
Yesterday Friday 11/15 was the expiry date for many of my options. About 1/2 of the covered call options ended up in the money, due to semiconductor stocks and some healthcare stocks surging in the last couple of weeks.

Having those options assigned has brought my stock AA down to 54% from 60%. And selling the stocks below market value costs me about $25K. However, I recovered more than 1/2 of that with the option premium, plus the cash-covered put premium.

Yes, when I saw that these stocks were surging, I did not want to buy back the calls because the time value was so high, and also did not want to roll them to next month. So, I sold puts to buy the stocks at lower strike prices than the calls, and of course those expired worthless. Together with the covered calls, I left only $10K on the table, compared to selling the stocks at market prices on Friday.

At this point, with my stock AA lowered as I wished for, what do I do next? Having mucho cash on hand, I think I will sell puts to buy stocks back at a lower price than I sold them at. Again, I will spread out my trades to be safe.

PS. Made $94K on option premium so far this year, which is included in the 20% return YTD of the whole portfolio, as reported in another thread.
 
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My goal for 2019 was to grow the portfolio by at least a million dollars. I don't think it is going to happen. :(
 
You could have put it all on Apple (up 80% YTD), or even a pedestrian ETF like SMH (up 54% YTD). Or even a more benign ETF like XLK (40% YTD). Yes, risky, I know, but you could have had a lot more than $1M gain.

Or you could have started the year with more. Perhaps this is easier and safer than the former approach. :)
 
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Or I could have lost a million dollars last December only to gain it back in 2019. That is, I could have started the year with less.
 
MTUM is out ahead of the rest of the US stock market today, but it didn't make any sense to me, so I sold the MTUM bought last month and now have the cash for it. I was overweight in US large caps anyways, so this helps get me back to my desired asset allocation. I'm not sure what I will do with the cash right now, but I hope the stock market tanks, so that I can buy shares lower than they are now. 420

Afternoon update: Well, that has not worked out. There was a quick dip after the sale, but things have marched on and left me in the dust. :(
 
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How lucky did I get? :cool: Yesterday I should've immediately bought some BND or other bond fund shares with the money raised from selling MTUM. Now I need some ideas of what to do with the money. 622
 
Y'all deserve an update on the last trade: MTUM dropped about 1% below my sell price while bond funds went up. I didn't do anything and stayed in cash. Today MTUM is up about 1% above my sell price and bond funds are still going up. 313 Clearly, I would have been better off not making the trade.
 
I couldn't sit here holding cash, so I just used the cash from the previous sell to buy BND which has gone up about 1% since earlier in November, but is down about 0.4% (including the last dividend) since the last time I sold BND in this account back on 10/04. So while the last week has not been pretty, the last month was a decent 4+% for an account that typically was allocated 100% bonds. Since 10/04 through yesterday, Morningstar.com says VBTLX (Vanguard Total Bond Index fund) has a -0.3% performance. While that is not quite a fair comparison since this account did not hold a bond fund the entire time, it does make me feel better.
 
Well look at that! Bond funds don't go up 0.5% in one day very often, but once again BND is up more than that already this morning. Sure, it has been down a little bit recently, but the shares I bought recently are in the black. So that means I need to sell some shares of BND following my market timing method. 011 I may not buy anything with the cash right away since other things have not dropped very much at all.

I will also note that the MTUM I sold earlier in November is now back trading lower than I sold it for.
 
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Bought some total US bond index ETF with the cash from yesterday. 198. Since the price had dropped as expected, it was worth it to buy SPAB back a little bit ago. I used SPAB instead of BND because looking at real-time level II order books and transactions suggested I could capture an extra 0.03% value, so I did.
 
Some bond ETF dividend were paid out in the past 2 days, so I re-invested them this morning back into bond ETFs. I probably wouldn't be telling you this, except that those bond ETF were down a bit at the market open and have been climbing in price ever since, so all trades are currently in the black. 457 :)
 
Back on September 25, I bought back shares of VBTLX (Total US Bond Market Index fund) in post #1937 of this newsletter when VBTLX was down about 0.5%. If I look at how VBTLX has performed in the 2.5 months since, I can say that it has returned about 0% or nothing with dividends reinvested. That is, it will be right back to where it was at the end of today since bond ETFs are down more than 0.4% today.

So in the next 2 hours, I think I will submit an order similar to the 9/25 order: Sell Small-caps and buy shares in a bond fund. I'll post an update before the market closes.

007 Update: I sold small-cap index ETF and have bought total bond index ETF, so I expect small-caps to go higher and bonds to go lower to toss an extra loss my way.

Update to update: Based on closing prices of the ETFs I traded, I am $35 richer for having done this trade versus not doing the trade. Drinks on me tonight!
 
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I cannot explain it, but with the news out after my transactions yesterday and the futures overnight showing gains, I thought that yesterday's trades were going to lose money over doing nothing. I was totally surprised this morning to see the SPSM that I sold to have more losses and the BND that I bought to have gains.

... and then a reversal a short time later. [-]Oh, well.[/-]

(11:30 am EST) ... and then a reversal to the reversal. Looking good!
 
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OK, I admit the last trade was only good for about a day, then stocks took off and bonds have dropped. So I am down some money relative to not doing that last trade. :facepalm:
 
It's been a month since any updates. Since last trades on 12/12/2019 the stock market (Total Stock Index fund) is up 6.1%, Total Bond Index is up 0.4%, small-cap index ETF is up 4.2%, and MTUM is up 6.9%. In others words, I should not have made those trades because I would have made more money doing nothing.

In the meantime, 4th-quarter dividends were paid and either spent or reinvested, but no major transactions were made. My asset allocation is right at my desired equities:fixed income ratio, so no changes or trades anticipated for awhile.
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And a week later ... things have gotten interesting. :) 104

The small-cap ETF has lost 5% and bonds are up, so my immediately previous post of 01-18-2020 is now null-and-void. The things I sold back on 12/12/2019 are trading lower than the price I sold them for and the things I bought are trading higher.

It just goes to show how much luck plays a part in all this market timing stuff.
 
I trimmed a bit into today's rally. Mostly because I bought something yesterday in the midst of the decline and I hadn't done as much end of year re-balancing as I should have. (I still don't quite know my asset allocations as I need to add a bunch of transactions, both buying and selling - to my tracking spreadsheet. This is the one area where having consolidated accounts would be useful.) If the market continues to run up from here, consider this my "sacrifice to the market gods".
 
Posting on LOL's thread again. Did a bit more trimming today into the strength. With the 1/28 and today's sales, reduced my equity asset allocation by a little over 1%.
 
I haven't made any transactions in a while, but today I sold some VEA (large-cap developed foreign) to get some money to pay some upcoming bills. 924 I chose VEA for two reasons: (1) it had the least percentage gain of anything in my taxable account, so any realized gains won't dig into my carryover losses that much, and (2) it had the least one-day drop today of anything in my taxable account.

I don't see stock markets going up in any significant amount until the coronavirus thing has more clarity. In the meantime there will be quite a bit of downward pressure. I may have to rebalance from bonds into equities if stock markets drop violently, but as long as it is a slow drip-drip-drip downward, then I won't be buying equities nor rebalancing.
 
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