Tuesday, July 6, 2010


Today (rather last week) we also completed another long term bearish technical pattern.  When trading we often use signals to identify when you need to get in and get out.  I have used the signal personally and this is one of the items that caused me to have more conviction to move money out of the market in December of 2007.  (Look at December 2007 on this chart).  Now depending on how active you are as a trader you might have heard about the fabled "DEATH CROSS" pattern.  This is typically when you see the 50 day moving average swoop down and cross over the 200 day moving average.  The pattern I am showing here is NOT the death cross.  I personally believe that this pattern is much more reliable because it uses very long changes (weekly) to identify it's move.  Anyway, use it as a warning if nothing else.

Now we don't know what will happen if the market suddenly rebounds in the next few days causing the weekly indicator to move higher.  It is just really important to note that this technical indicator showed up.  I for one am not adding to positions as I just mentioned in the 2nd Quarter Round Up.

And for those of you that are saying to yourself, awwww, it's long term money, I don't need to move to cash - I say whatever!  Long term money is intended to be preserved and grow, not get cut by 35% or say flat to negative after 10 years!  Don't lose your cash!  Yes, wait for a bounce, but then protect your gains.

Trade carefully!


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