Last week it seemed like market would rally based on the news out of Euro-zone but it was not enough. Euro debt crisis kept the pressure on the market. Every time market tried to make a move higher, it was not successful. Next week is very crucial as 6 member US Congress committee needs to come up with $1.2 trillion in order to avoid compulsory massive spending cuts across the board (including defense) as outlined in August. But to avoid any US debt ratings cut (by ratings agencies) they have to probably come up with much more than just $1.2 trillion. As of now, no progress is made by the committee and both parties could not agree on any compromising solution to the problem. One would think that by now they would understand the gravity of the situation but don't forget these are politicians and they always play their game.... So what's in store for the markets!!! From BPNYA Index chart below, it looks like we may soon cross EMA(30) downwards, which would be our SELL signal. This is how market dynamics change in a weeks time. All we need to do is be alert to avoid major damage to our financial portfolio. Take a look at NYSE Index chart comparison below. Today's chart is very similar to one in early 2008, so be the judge of what's coming our way. Remember, markets can do whatever it wants but its better to be aware of probable outcome, Isn't it!!! Sometime back we posted below market trend chart, see where the dotted line is headed signifying the trend change and future direction. You can also checkout Market Trend Identification section. Now see below updated chart and decide for yourself what's in store for the markets... Finally from our market timing tool this is what we have in case BPNYA crosses EMA(30) in next few days... (if you haven't seen it then you can find it in the same downloadable spreadsheet). _What does it mean for our Long Term Investment Accounts!!!
401K/HSA/College Fund: We may consider moving to money market fund as market outlook does not look impressive from here on. Traditional IRA/Roth IRA: We may consider moving into cash or invest in Bond/Inverse funds which might prove to be better option for now. Based on our "Advanced Strategies" section we can invest in ETFs using our BEAR market ETF list. Remember, capital preservation is our TOP PRIORITY. Comments are closed.
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