Asset Allocation June 2012

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by Steve Auger

Asset analysis should be used to determine the overall percentage allocation of an investor's portfolio to each asset.  Once this is determined then the investor can substitute his or her favorite stocks in place of the associated ETF.  For example, if the asset allocation indicates that the investor should be in U.S. Equities then he or she could substitute any U.S. stock(s) in place of VTI ETF.  The asset analysis is provided monthly so that the investor isn't constantly adjusting their percentage asset allocation.

 

Asset Analysis Summary

The markets showed a fairly significant downturn last month except for Treasury Bonds which made a reversal to the upside.  Use extreme caution in your trading this month as the bearish markets are somewhat oversold and could rebound with any positive news - QE3 for example.

 

Asset Class
 ETF
 Status
 Technical Analysis
 Brkout
Brkdown
U.S. Stocks
 VTI
 Caution indication according to technical analysis - yellow light. N/A
 < $65
Intl Stocks
 EFA
 Caution indication according to technical analysis - yellow light.
  • Trendline support level (neutral)
  • Williams%R trending down (S.T.)
  • OBV bullish (L.T.)
 N/A
 <$43
Commod.
 DBC
 SELL indication according to technical analysis -Red light. N/A N/A
Real Estate
 VNQ
 Caution indication according to technical analysis - yellow light.
N/A < $59
Treasury Bonds
 IEF
 Buy indication according to technical analysis -Green light.
  • Trendline breakout (bullish)
  • Williams%R bullish(S.T.)
  • OBV bearish (L.T.)
 N/A
 N/A

 

 

Vanguard Total Stock Market

ETF Symbol: VTI


TWeekly annotated chart for Vanguard Total Stock Market ETF with technical analysishe Vanguard Total Market VIPERs ETF is sitting at a support level.  Both Williams%R and On-Balance Volume are bearish.  Aggressive traders should go short on a break below $65.  There doesn't appear to be any bullish possibilities built into the chart.  This could change, of course, if/when QE3 is announced.


 

iShares MSCI EAFE Index Fund

ETF Symbol: EFA

Weekly annotated chart for iShares MSCI EAFE Index Fund with technical analysisThe price for iShares MSCI EAFE Index Fund has dropped significantly in the past month and is now sitting at a trend line.  It is time to take some profits on the short side and wait for a new signal.  It is not (now) the time to enter short as the move has already been made.  Aggressive traders may consider a new short position if EFA drops below $43.


PowerShares DB Commodities Tracking Index Fund

ETF Symbol: DBC

 
Weekly annotated chart for PowerShares DB Commodities Tracking Index Fund with technical analysis

PowerShares DM Commodities Tracking Index Fund price has broken down, falling below the lower trend line of an ascending channel.  There may be a bounce at the current price level but long term the trend is down.  Maintain short positions.

 

Vanguard REIT Index ETF

ETF Symbol: VNQ


Weekly annotated chart for Vanguard REIT Index ETF with technical analysisExercise caution with the Vanguard REIT VIPERs. There is no clear forward direction.




iShares Barclays 7-10 Year Treasury Bond Fund

ETF Symbol: IEF


Weekly annotated chart for iShares Barclays 7-10 Year Treasury Bond Fund with technical analysisThe iShares Barclays 7-10 Year has reversed itself from the previous month and is now bullish based on the latest polical news from European Union.  Traders should wait for a pullback to buy as the ETF is somewhat overbought.