I pointed out earlier today that this would happen and the SPY for example peaked at about 10:24 am ET and has been skidding slowly from there. That does not mean the day won’t turn out positive, but it does mean there is not sufficient momentum YET in the buying to reverse the trend. Could it show up later today? Yes. Will it is the issue. If you are heavily weighted in stocks see my website on how to go “passively short” as I have coined it. It is one way to handle a bear market rally and limit your downside, while being willing to get back in as needed.
Buy and hold has failed. Wall Street doesn’t care for that sort of view because they make less money on you than if you sit in falling mutual funds and ETFs. Think about it. It’s YOUR money, not theirs and your profits from this long rally we’ve seen.
Do not jump out (in general) in one jump. Scaling out is usually wiser due the the bear market rallies we always tend to see on the way down.
What I teach you through my newsletter worked in 1987 and it worked for Japan last week. Proof that market timing can work if you are taught by someone who understands not only how to get out, but how to get back in!
The move today is likely just a market timing bounce in a decline. You’ll want to check back here for further comments. Take a look at my free SP500Tracker™ newsletter. This week’s copy with my stop is already available to FREE subscribers. It will be out again this weekend and again, it’s FREE, so please subscribe below if you are concerned about where the stock market may go from here:
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© 2011 David B. Durand, M.D. All rights reserved.