Past week has been historic week for the markets. We all witnessed, consecutive major single day swings (on UP/DOWN side) in the market. In short, these are turbulent times and market is extremely volatile. We all must have heard/read following so far:
Follow the technique/system and NOT Media/News Few things to remember: - Do not Panic - Stay calm - Have patience DO WE CARE IF:
Let's check current BPNYA chart below - From above chart, we can see when we got our SELL signal and the actual market decline. We are expecting a market bounce this week in lieu of oversold market conditions, that does not mean we will get a BUY signal. The nature of the bounce will decide market direction. Typically, market has a tendency to bounce after a BIG decline and then the bounce fades by another slow market decline (dust settles). ONLY after this process, BIG rallies start which is sustainable. The entire process, can be frustrating as market tends to be very volatile and could take anywhere from few weeks to months. However, we should not forget the fact that market can do what they want hence further decline without a rally is very much possible...
So how much time we should wait and how do we know when to enter?
What does it mean for our Long Term Funds!!! 401K/HSA/College Fund: If for some reason you still haven't moved your money to money market fund then we might want to hold further and sell into the small rally (if we get one!). However, we have a huge risk especially if get another sharp decline before the short rally. If you already moved into money market then have patience and relax till we get BUY signal. Traditional IRA/Roth IRA: If you are already invested in list of BEAR ETFs then you are already enjoying the gains you made last week. Make sure you are ready to protect those gains if market decides to make a rally attempt. Just follow BUY/SELL signal as no trading restrictions are applied on these accounts. Choose ETFs based on the strategy provided here. Comments are closed.
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