Market is on wild roller coaster ride, 1 day UP another day DOWN. Certainly, market is very volatile at present. So how do we tackle this scenario!!! Where is market headed next? When will we get a definitive direction? What should we expect!!! Lets calm down and understand what our charts are telling us. From BPNYA chart below, it is apparent that if market keeps going down further then soon we should get a SELL signal (BPNYA crossing EMA(30) downwards). Since we do not have enough confidence in current market action, its wise to remain on sidelines and NOT remain invested. From NYSE chart below, we can clearly see that market is moving with wild swings inside this channel. As we can see the channel formation is after a significant drop, such an action is also known as bear flag and considered very bearish. If the channel is broken to downside then next level to watch is the dotted line. Usually, when such a channel is broken then the fall is directly proportional to the fall before the channel formation. Sounds scary, Isn't it! But think of this as an opportunity to invest on right side of the market and gain from this market fall. But HOW? Read our Advanced Strategies section and see if it makes sense. What does it mean for our Long Term Funds!!!
401K/HSA/College Fund: Market is very volatile and hence risky to remain invested at this time. Best strategy is to move money into money market fund for now. If for some reason you still haven't moved your money to money market fund then remaining invested further is very risky especially if we get another sharp decline. Traditional IRA/Roth IRA: Be careful as the market is very volatile. 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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