OUCH!

LONG TERM TREND: Believe it or not, even after last week's price action, the long term trend is technically still up. BUT...time is running out. Unless the market substantially rallies next week, one of the important conditions I look at to confirm a long term bear market will be in place.

SUGGESTIONS FOR 401-K: The market closed down 6.5% from last Friday (see chart). This, after a VERY bullish week the previous week. In a "normal" market the kind of week we had last week suggested a high probability move to the up side. But obviously the market is sending a message. The 110 level in the SPY now becomes a very important "line in the sand". If it is not broken on a weekly closing basis we could see a long term trading range similar to last year (17 weeks before it broke out to the up side). If it is broken, then the probabilities favor a further move down to test the low made last summer around the 102 level. In my own 401-K I'm going to hang in and watch what happens next week. But if I weren't in the market already, there is no way I would buy in after last week's price action.



ONE FINAL THING: I've been putting a lot of thought and research lately into simple hedging strategies that can greatly reduce the drawdowns one experiences when staying long the market in their retirement accounts. In the coming weeks I'll reveal some research that I think you'll find exciting. I"ll also reveal an option strategy I've finished testing on that takes advantage of the shorter term up and down moves in the market.

Be Blessed this week

What A Difference A Week Makes

LONG TERM TREND: The long term trend is still up.

SUGGESTION FOR 401-K: The title of today's article says it all. Just take a look at the attached image. Not only did the week finish MUCH stronger than last week, but the volume was much higher as well. This suggests a very high probability of a higher move over the next several weeks. The last time the market experienced a week of this kind of strength after a major correction was on 9/4/2010, just a little over a year ago. Is this a guarantee that the market will move higher? Obviously not. But the probabilities favor it. I will be moving my long term funds back into the market again.



Have a great weekend everyone. Any questions, comments or feedback are welcome!

Waiting Game

LONG TERM TREND: Not much new to report. Technically the trend is still up.

SUGGESTION FOR 401-K: This week closed lower than last week, which shouldn't come as any surprise since the week before, the week closed down after testing the mid line of the price channel. The next likely course of action is a high probability test of the 1100 area. This is a very important area. If it does get tested and we get a very bullish weekly price bar, this could set up a very high probability rally that would result in a continuation of the long term bull market. In any event, this is NO TIME to get back into the market in my opinion.

Weekly Update -- Patience!

LONG TERM TREND: The long term trend is still up as August did not give a sell signal. That is the only good news.

SUGGESTION FOR 401-K: I'm staying in the sidelines. Last week I stated that the market still has a lot of work to do to convince me that the long term trend may resume to the up side. Remember a couple of weeks ago I stated that once a decline of this magnitude takes place, it can take quite a bit of time for the weekly chart to tell us the long term trend up is ready to resume? Well, take a look at the attached chart. After the market rallied last week, it stopped dead in it's tracks at the mid channel line and closed lower this week.



Have a great holiday weekend and don't forget to fly your flag!