We've Returned to the September 30th High: Market Timing and Investing Strategies for Double Tops
This market timing strategy works in shorter term time frames as well as long term time frames. So it APPLIES TODAY. You can do one of FOUR things:
1. SELL NEAR THE TOP: Use market timing to sell part or all of your position at or near the double top and rebuy it if the market closes above the September 30th,2010 high of 1157.16 in the SP500 or above 115.79 in the SPY. Those are intraday highs.
WARNING: Do not sell if you will not be emotionally able to rebuy. That is the mistake of a novice investor. You must be willing to rebuy if the SPY/SP500 closes higher than the above targets. And remember that one day over a target number may not be enough. Yes, it's tricky. See my page on Passive Shorting™ here:
2. USE A MENTAL STOP LOSS: Use a tight intraday or closing stop on part or all of your position, so you will sell only if the market drops by X percent from here. You will not be protected from gaps down before the open.
3. REVERSE YOUR POSITION AND GO SHORT: Most of you will not do this, so I'd suggest "passive shorting" instead. See the link above.
4. DO NOTHING: This is buy and hold. You can do this with solid companies, but even solid companies stocks go both up and down by ridiculous amounts. Even Berkshire Hathaway stock has dropped by 50% multiple times in its existence. It will do so again at some point.
BUT do you know how to leave the market? Scaling out works better in some ways than others.
DO YOU KNOW THE RIGHT WAY TO SCALE OUT OF THE MARKET? If you don't, you would be crazy not to read the following report:
I'll send you a free report on "Scaling In and Scaling Out: Getting In and Out of the Markets Profitably."
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