Asset Allocation May 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

This month US Equities and Real Estate remain bullish while the remainder of the asset class categories have turned south.

 

Asset Class
 ETF
 Status
 Technical Analysis
 Brkout
Brkdown
U.S. Stocks
 VTI
 Bullish indication according to technical analysis - green light. N/A
 < $69.50
Intl Stocks
 EFA
 SELL indication according to technical analysis -Red light. > $56.1
 N/A
Commod.
 DBC
 Caution indication according to technical analysis - yellow light. N/A < $27.10
Real Estate
 VNQ
 Bullish indication according to technical analysis - green light. N/A < $64
Treasury Bonds
 IEF
 SELL indication according to technical analysis -Red light.
 > $106
 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 has been trading in a horizontal channel this last month after a strong price appreciation the previous month.  This represents a "continuation pattern"  with the price likely to continue its run upward.  Last month I recommended going long so keep this position and consider adding to it if the resistance level shown on the chart is penetrated. Exit below $69.50. 


 

iShares MSCI EAFE Index Fund

ETF Symbol: EFA

Weekly annotated chart for iShares MSCI EAFE Index Fund with technical analysisThe iShares MSCI EAFE Index Fund stopped out of the long position last month.  Although the On-Balance Volume is still showing bullish divergence the breakdown from last month is quite bearish.  Agressive traders should short international stocks and exit if EFA goes above $56.10.


 

PowerShares DB Commodities Tracking Index Fund

ETF Symbol: DBC

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

Exercise caution here as PowerShares DM Commodities Tracking Index Fund got stopped out last month.  The price may trade within the Ascending Channel (see chart) for some time but will likely break down through the lower trend line aat some point in time.  Aggressive traders should go short below $27.10.

 

Vanguard REIT Index ETF

ETF Symbol: VNQ


Weekly annotated chart for Vanguard REIT Index ETF with technical analysisThe Vanguard REIT VIPERs was quite bullish (again) last month and has formed a new Ascending Triangle.  The Williams%R suggests that there is a bullish trend.  U.S. Real Estate remains a buy (green light) but the protective stop should be up to $64.  Keep an eye on the On-Balance Volume as it is slightly bearish .



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 broken down from an ascending triangle.   The On Balance Volume and Williams%R are both indicating bearishness.  This ETF should not be held.  Aggressive traders should consider selling short or alternatively buying a similar but short ETF.  If short then exit above $106.