I am now partially invested long in my 401K based on my monthly system, probably to the tune of 35% of my 401K portfolio. All my investments in R/IRAs are cash so this does not represent 35% of my total portfolio, much less. Due to the Exit long signal on my SPY chart, I am hedged on even this exposure with put options on SPY. During last week the markets dropped 3% and while my 401K funds dropped in value, my put options increased in value and kept my losses contained. I would normally remove the hedge once I see long signals on SPY. Meanwhile the chart on DIA still shows long, although the indicators are certainly showing a weakening and wilting of the index.
Last week I also placed stops on my long position on GLD and AMD to protect the modest profits I had in each. I was stopped out on both and was glad to lock in some profits as both have turned negative to my point of entry. I hate giving up gains on positions and have to cash out with a loss. Stops do have its usefulness at times and this was one fo them.
I see emerging markets and my IIF India fund charts all showing down signals. I don’t like that as those are the regions I hope to see lead with gains and right now they are leading with losses. At this time the bond funds like TLT are holding up as well as the US Dollar, UUP. The focus is on Europe and we are waiting to see if they can extract themselves from the contagion they are in. Can the leaders lead themselves out of trouble or will the countries financially self-destruct from getting goodies that they cannot give up… and within a couple of years, the US will have to face up to its own debt situation…
The markets are ripe for a rinsing but that is just my brain thinking. Much better to stop that and follow the signals.
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