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