The BPNYA Index current chart below shows BUY Signal:
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:
- We can wait for few days and then decide what we want to do (conservative)
- We can may be start investing 10-20% into our selected 401K Mutual Funds (moderate)
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:
- NYSE keeps moving in this channel until it reaches MA(50) or possibly MA(200) and then reverse hard for another leg down
- NYSE makes a move down (bear trap), may be touch 6600-6800 and then snap back right into the channel
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...