Markets have been in correction mode from beginning of May. Lets check current NYSE Index chart and see if it provides any clues. From the NYSE chart above, we can summarize few things:
Possible Conclusion: Typically SMA(50) or SMA(200) can act as support (spring board if price is above it) or resistance (cap if price below it). We saw 1st support (spring board action) and bounce on around mid June, we may see similar action next week (optimistic view) or it might break the support and keep going down (pessimistic approach). Below BPNYA Index chart combined with NYSE Index shows how our SELL signal was a good guidance of what was coming our way. We moved our long term savings into money market or cash and avoided the loss. From BPNYA current chart below, our EMA(30) (green line) is still far from BPNYA Index and hence our BUY signal may not be generated for couple of days/weeks. Market may decide to consolidate right here and stay in a range till earnings season arrives by 2nd week of July. However, we may see wild action here even though market remains in a range. Other possibility could be that markets continue the journey downwards So far we have been successful in avoiding the market correction, lets stay alert and preserve our capital.
What does it mean for our Long Term Funds!!! 401K/HSA/College Fund: We remain in money market funds until we get BUY signal Traditional IRA/Roth IRA: Based on our "Advanced Strategies" section we should/could have invested in BOND/Inverse ETFs when we got the SELL signal. But if we did not do it then now may not be the right time to enter as we might stay in a range or get a bounce here, so waiting for the right opportunity is the best strategy. Comments are closed.
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