January 2014 has been a down month… some stocks have dropped
as much as 10% from its 2013 highs. The major indexes are down 4-5%. Emerging
markets has been showing weakness even earlier. My decision to buy some SPY put
options early January has been profitable so far. Put options rise in value
when the underlying drops. I am also pared down on my 401K.
Meanwhile Fidelity lectures me for pulling out of funds
without being invested in it for more than 29 days. I am still stuck in a Fidelity
International fund because they will penalize me 2% in redemption fees if I
pull out faster than 20 days. Frustrating. This is why I will never own a
Fidelity investment account outside of my company 401Ks. I know friends who
will never pull their money out despite getting warning signals… it is hard to
get rid of the 4 years of upward euphoria we have been enjoying. It seems unlikely
the market is likely to crack. And instead just keep climbing forever…but
I follow my systems and they have flashed exit signs on many
of the major equity indexes. So what is perking up?
IYR and VNQ (Real estate ETFs) are showing
upward signals. In my Ivy Portfolio selection I am currently in AGG (Bond fund)
and now will put money into IYR (Real estate fund) at market open Monday. See
chart below for IYR. I am out of the 3 other sectors, US
Rahul, very nice blog.
ReplyDeleteYou indicate that you will be buying IYR at the open on Mon. IYR is currently at resistance, and just under the 200ma (major resistance). As a technician, wouldn't it be more prudent to wait until IYR breaks thru the 200ma before buying?
We never know when our trades result in a win or loss; but by following a system consistently, we will be safer in the markets... see my latest blog... I am exiting IYR. better to cut my loss quickly then let a mistake linger.
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