ITA Wealth Management

This morning, I connected to StockCharts so I could view the technical indicators for the “Big Six” ETFs.  “Big Six” is defined to include the following equity U.S. ETFs: VTV, VOE, VBR, VUG, VOT, and VBK.  These are all Vanguard ETFs.  All six are yielding positive RSI, MACD, and CMF graphs and all, when I last checked, were priced above their 26-Day Exponential Moving Average (EMA).

Even though I’ve picked up several ETFs over the last few trading days (reported in Premium Content), I will be more confident when the 26-Day EMA moves from below to above the 52-Day EMA.  While it seems a long way off, another confirmation will occur when the ETF (or stock) price crosses from below to above the 190-Day EMA.  This is the green line in my graph.

I use a 190-Day EMA as the 200-Day EMA is an extremely popular moving average.  By selecting the 190-Day EMA, I am picking up signals a few days before the crowd.  That is the reason for using 190 instead of 200.

Having a portfolio plan in place at this time is very important.  Know what assets you will include in your portfolio and what percentage will be allocated to each class.  If you are going to add a few stocks to enhance return while reducing risk, keep an eye out for the best buys.  If you are not a Premium reader of this blog, I recommend using Morningstar to see their ratings for; 1) Fair Value Uncertainty, 2) Economic Moat, 3) Stewardship Grade, 4) Star Rating, and 5) Buy Price.  All these indicators are taken into account in the process of determining “Creme List” stocks.

Find low correlated ETFs and stocks to populate the portfolio.  Better yet, seek out an asset class that has a negative correlation if possible.

Lowell Herr

Photograph: Wales

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