Market has relentlessly continued its trend of making NEW HIGHs in last couple of months and at some point prone to start a meaningful correction of 8-10%. However, since most people are expecting a correction, most likely market will do exactly opposite. This causes frustration and at some point people start giving in and get in the market at levels where it gets risky. As soon as most people are in the market and fully invested then comes the shocking surprise. Market starts the long overdue correction causing pain to many know as "maximum pain theory".
- This market is long overdue for a correction
- Can we time it exactly? NO but can we identify levels of risk, absolutely YES
- BPNYA provides us with guidance for low risk entries and high risk areas to exit, you can read about it in our Strategy section.
What does it mean for our long term investments?
- 401K - If you are still invested in markets then time to exit during this bounce and protect your gains. Opening new positions now could be risky.
- Stocks/ETFs - Take partial gains on open positions while have tight STOP LIMIT for remaining positions. Sometimes its better to be in cash than take risky bets.
Market appears to be in BULLish trend, however be cautious and alert...