All we hear on the street is :
- Raise Cash
- Sell your poorest performers
- Load up on Inverse ETF’s
- Tighten stops on performing issues
Keep in mind this is all being now said AFTER we’ve already fallen! This is exactly what you’d expect to hear AFTER we’ve already fallen. This is always the way it works. Welcome to the world of opposites. Human nature is to react usually AFTER the fact.
But not us — we trade our plan and plan our trades.
We’ve said it before on the long side and that was “buy the dips and sell the rips.” Only now it’s flipped over — “short the rallies and cover the dips.”
We also think given all the hoopla on the street that now would be a good time to talk about CHANGE IN TREND PATTERNS
In the stock market there are only three things you need to know
- Uptrends and how to trade them
- Downtrends and how to trade them
- Change in trends and how to identify them
Much like we saw in April where many of the go go stocks were putting in double tops we could now be very close to putting in a double bottom on the S&P 500, the Dow Industrials, The OTC Comp and Even the Russell 2000 index. They all show the same pattern as shown here:
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Disclosure: No positions