A Correction is
Over-Due
The S&P 500 has risen to an important resistance level, as it touches nearly a 5-1/2 year
high, and is less than 2% from a record close.
I have pulled my
money out of the market and have been
waiting for a pullback to offer a reentry level at cheaper prices.
Pulling out of the
market as it’s on the way up (Selling Strength) allows me to lock in profits,
and then buy more as the market is falling (buying weakness).
People tend to do
the opposite, Buy on the way up, at higher prices because all looks good, then
sell on the way down, due to fear or panic, losing money.
For the health of
the market, we need to have that pull-back that we haven’t seen. As the market
appears less of a risk to investors coming in now (raising equities), this
fights the inevitable pull-back that we need.
If we watch the
market performance recently, it’s been moving up a bit, then pulls back a bit,
but on average the trend has been a very painful and slow climb.
This climb is why I
have been suggesting that investors not get in now, and for those that have
been in, they should put their money on the sidelines.
Professional
investors have been buying protection against the inevitable pull-back.
Remember, the market
has already provided a 7.5% return in the last two months, so lets not get
greedy and lose that gain. Lock in your profits, and put your money on the side
to lock in those profits.
When you see the
market pull-back, get back in on the way down.
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