Masonson has never used buy-and-hold and never buys individual stocks. Instead, he uses ETFs exclusively. He completed a master's thesis in college on the relative strength methodology and uses the Web site ETFscreen.com as well as his own site, buydonthold.com. His book contains myriad sources for those who want to incorporate technical analysis into their practices.
Masonson also uses various stop-loss orders to protect principal. For those advisors and investors who wish to learn about technical analysis, he developed what he calls the "Stock Market Dashboard," composed of eight free, publicly available indicators. Here are the indicators he uses to decide when to move money in and out of the market:
1. The percentage of New York Stock Exchange stocks above their 50-day moving average.
2. The times when a broad market index such as the S&P 500 crosses the 100-day moving average.
3. The point at which the NYSE daily new highs minus the daily new lows reach an extreme number, which he defines.
4. The number of stocks that are on buy signals on a point-and-figure chart.
5. The bullish percentage in weekly investor sentiment.
6. The movement of the Moving Average Convergence-Divergence (MACD) Indicator on the Nasdaq composite index.
7. The "Best Six Months" strategy, which dictates that investors be fully invested from November 1 to April 30 of each year and stay in cash for the remainder of the year.
8. The crossover of the Nasdaq Summation Index Moving Average (NASI) with the MACD indicator confirmation.