Readers not familiar with the ITA Risk Reduction model would do well to review this blog post. Of the eleven portfolios tracked here at ITA Wealth Management, five are undergoing testing of the ITARR model and they are: Maxwell, Euclid, Madison, Gauss, and Kenilworth. Of these five, Platinum members have access to the trades for the Gauss and Kenilworth, but not the other three.
Within these portfolio we concentrate on eight critical ETFs and the are: Large-Cap Blend (VTI), Small-Cap Value (IWN), Developed International (VEU), Emerging Markets (VWO), Domestic Real Estate (VNQ), International REITs (RWX), Commodities (DBC), and International Bonds (PCY). Of these eight ETF, only VNQ and PCY are currently priced above their 195-Exponential Moving Average. Even VTI moved from above to below the EMA yesterday.
It appears as if the best selling points are now history, considering the huge market drop this week. As the different portfolios come up for review this month we will examine each carefully in an attempt to make the right decisions. As mentioned in another post, we will wait for the Bullish Percent Indicator (BPI) for the NYSE to turn positive. I suspect when the BPI is updated tomorrow we will see far fewer than 50% of the stocks showing bullish signals.
This is a time to be patient and wait for the demand to come back into vogue, as it will, and then be ready to put available cash to work when we see potential buying opportunities. For investors who are adding money to their portfolios each month and do not need to withdraw for living, this market is a blessing as one can purchase more shares at a lower price.