Good Evening,
It got ugly quickly and stayed that way with the media blaming investor concern over possible FED action for the losses. I’m really not sure nor do I particularly care. The fact is that the market dropped worse than it has in a long while. My concern, as always, is the pricing action that is in front of me. Are we topping? Probably not, but maybe so…
The days selling left us with the following signals: C-Neutral, S-Buy, I-Buy, F-Buy. Our current allocation is 42/C, 58/S. It has gained +0.15% for the year, but will surely be down by the next newsletter due to today’s dismal results.
As I have said many times before, one day is not a reason to panic.
One of three things will happen.
#1 The market will turn back up and whipsaw those who jumped out at the first sign of weakness. That happened 4 times in 2013.
#2 It will continue to go down in small increments over several days and generate sell signals in which (you guessed it) we’ll calmly sell and take a defensive positions.
Or #3 It will drop a few more days like it did today and generate sell signals in which case (you guessed it again) we will calmly sell and take defensive positions.
We have done that so many times since we started this group that it is just a normal day in the office for us. Should we be forced to sell as in either the 2nd or the 3rd scenarios we will do so with the majority of last years awesome gains in place. For those of you that are new to the group, that’s the way the system works. We have a plan, we know what we’re going to do and we do it. We would love to see it go up everyday, but unless you take the past few year of quantitative easing as an example, that hardly ever happens. We get out and when the time is right we get back in. With God’s help that’s what we do and do well. I’m anxious to see if the next few days brings us yet another V shaped bounce or if we continue to pull back. Personally, I wish we could get a good correction. It would be healthy for the market and would allow us a new chance to make some money. Well, I’ve bored you enough tonight. Have a great evening and may God continue to bless your trades.
Scott
