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... BPNYA Index chart bellow clearly shows that our SELL signal [BPNYA crossing EMA(30) downwards] is almost triggered. Also it is above 70 mark which tells us to be cautious. If market continues to creep higher from this level without a pullback will ONLY lead to a sudden and bigger fall at some future date. When we say pullback or correction, it does not necessarily mean 5%-10% down but market can go sideways, we might see some increased volatility. This is actually healthy for BULL markets as it provides a stage for markets for next leg up. What do we do about:-
1. 401K portfolio - You can choose to move into cash/money market or wait for actual crossover of BPNYA and EMA(30). 2. ETFs/Stocks - Be careful as any further gains from this point could be difficult hence using Trailing STOP or STOP LOSS would be more beneficial to protect gains. Remember, capital preservation is our TOP priority. Comments are closed.
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