Market is currently having tough time to make any new gains with confidence. In short, it indicates that less # of underlying stocks are participating in the rally. In other words, market may continue to go sideways or pullback which is in fact healthy for the market at this stage. However, we should see increased volatility in coming days with wider swings in the market, so do not fall for the trap!!! Below zoomed in BPNYA Index chart shows our SELL signal is almost triggered. It won't be a surprise if BPNYA line crosses EMA(30) line up/down couple of times before eventually moving down. Since BPNYA is above 70 and our SELL signal [BPNYA crossing EMA(30) downwards] is almost triggered, we do not invest back into markets unless BPNYA falls below 70 mark. However, historically market has managed to make not more than 3-4% gains when BPNYA stayed above 70 mark and at least once crossed EMA(30) downwards, although the volatility has increased during that time period. What does this mean for us?
Stay focused and DO NOT fall for any traps. Protect your gains and stay alert. 401K Portfolio: If invested then now is the time to protect gains and move to money market fund. If you missed the rally then wait for next opportunity. Stocks/ETF: Be careful and protect your gains with STOP LIMIT. Remember, capital protection should be our TOP PRIORITY... Comments are closed.
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