Last week, our model gave us a BUY signal as BPNYA Index crossed EMA(30) upward. Does it mean we start investing in our 401K and IRA accounts!!! Most of us are in a dilemma as market is acting volatile with large swings... Do you have a plan!!! Remember: When we are in dilemma, we do nothing... keep it simple stupid... Why? The BPNYA Index current chart below shows BUY Signal: Below NYSE Index chart shows how market is acting in a channel: Above charts indicate that market will keep moving in this channel for few weeks before it makes a decisive move on UP/DOWN side. Based on the market trend analysis, we believe that probability of market breaking down is higher, however it may take several weeks/months before the actual significant push down.
Since we are not completely convinced at this point and have our doubts about this BUY signal, the best strategy as outlined earlier would be to do one of following:
Since we are not fully invested, we do not have BIGGER loss. Option 2 above is more risky and NOT recommended as of now. Most likely market scenarios from here:
No matter which route market takes, it is less likely that market will stage a massive rally. Instead, after the bounce rally or moving in the channel is done, we might get another significant drop. In coming days, we will show the similarities between 2007-2008 period vs current period.... We are in process to determine fake/risky BUY signal so that we can make better decisions. Once our analysis is done we will post our findings... STAY TUNED!!! Comments are closed.
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