Market continues to make NEW HIGHs and tempts everyone who is in cash or exited market early, Isn't it!!! With all the chatter on the news and watching market flying high with each week, its damn difficult to stay out of market. So what should we do?
Market appears to have pulled back a little, Will it find a support at MA(50) line? Earnings season will start from next week driving volatility higher. What to expect next!!!
Last week Cyprus got a deal and apparently could not derail the market uptrend. BUT earnings season will start in ten days and depending on balance between expectations and quarterly results along with guidance has potential to derail this train. What to expect in near term?
Sequester is weighing on the Markets, you can read more about sequester here. In long run, it is good for our economy as sequester will enforce spending cuts. But spending cuts always come with pains, as we need to change our spending habits as a nation. Besides that Italy election also added to the volatility as Euro-zone issue is NOT resolved just kicked down the road. What should we expect next!!!
From mid-September on-wards, market was finding hard to climb any further. It established a range and kept moving in between. BUT in last two weeks, bad earnings guidance from companies has given signs of rollover or in other words "correction". How long shall we expect this correction to last?
All it takes is a week and market scenario changes. Last week was very volatile with wide swings as expected, but fortunately our history teacher (BPNYA Index) guided us well and we were out of the market before all the action unfolded. Remember, all we are trying to do is increase our "odds of winning" and "protect our gains" as well as avoid "major losses". Follow the guidance provided by BPNYA and in most scenarios we should do well...
After several weeks, we finally got a SELL signal. When everyone started saying market is due for correction, market kept going higher and after so many weeks we got the actual signal. That's why having a strategy/plan works in our favor. If we continued listening to news and TV noise then you would have exited market long back and missed all the remaining upside, Isn't it!!!!
Every dip in the market is bought consistently which leads to no meaningful pullback/correction. This also at times gives an illusion that market will keep going higher like this for who knows how long! But do not fall for such trap, element of surprise is the key Markets weapon. Market is overdue for a pullback/correction, getting in the market at wrong time can lead to losses...
Market seems to make several attempts to rally but after few days, the steam is lost and we are back to square 1. Euro-zone crisis is not easy to resolve and as every day passes, investors are loosing confidence. Hence we are seeing slow and contained selling. What does it mean for us!!!
If you have been following this site then last week was in NO WAY surprise for you. You should have expected the market decline as our history teacher (BPNYA Index) guided us quite well, Isn't it!!!
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