Markets have been in zig zag motion from last couple of days after the major decline in 1st week of August. DO NOT get caught in the media/news/pundits speculations about BUY at the bottom frenzy. No one knows if this is the real bottom. For now we might be settling into a range for next few weeks before the next market move.... Below BPNYA Index chart shows that we got a small bounce after the initial market decline. Does it mean this is time to BUY??? Well, the question we should ask is "did we get a BUY signal" !!! As we can see, EMA(30) is not anywhere close to crossing BPNYA. So be patient and don't make decisions on assumption and speculations. If we get a market rally then we will also get a BUY signal. So don't worry about missing a rally. If you haven't yet checked out our market trend analysis then please take a look at it. We are very close to changing the market uptrend and any bounce or stabilization here could possibly lead to further decline confirming BEAR market. Lets take a look at NYSE Index: As we can see from above chart, market is moving in a triangular channel and break of this channel will decide the next market direction. If market breaks the triangle on either side without significant down/up move then it can still continue to move between 6900-7400 channel for weeks/months. Most likely market seems to be taking a breather here (stabilizing) and then start another leg up/down.
Remember, its very difficult to predict volatile market hence follow the system and stay alert! What does it mean for our Long Term Funds!!! 401K/HSA/College Fund: You should be in money market fund until you get a BUY signal. If for some reason you still haven't moved your money to money market fund then we might want to hold further and sell into the rally (if we get one!!!). However, we have a huge risk especially if get another sharp decline before a significant rally. Be patient and wait for BUY signal. Traditional IRA/Roth IRA: If you are already invested in list of BEAR ETFs then you are already enjoying the gains you made so far. Make sure you are ready to protect those gains if market decides to make a rally attempt. Just follow BUY/SELL signal as no trading restrictions are applied on these accounts. Choose ETFs based on the strategy provided here.
andre
8/31/2011 09:58:26 am
We have a buy signal. Are you really going to buy this market?
Admin
8/31/2011 10:22:41 am
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