Just when you think things are going your way, WHAM, the market slams you down. Lot of my technical patterns broke down once bad news hit them. RIG got hit by the drilling rig explosion and lawsuits. EK got slammed when it missed earnings expectations. ETFC announced a secondary offering by one of its rescuers. I think I sold most of my portfolio on Thursday and Friday (including Chipotle - CMG) and moved to cash. All I have got left is BCSI and CELG. If the market continues to trend down, both those patterns are also likely to fail.
I am seeing a lot of stocks acting like they have already topped out and are in an extended pullback. The big decision I have to make is whether to sell everything (including mutual funds) and go to 100% cash. The DOW definitely is indicating that it could fall below 11,000 and head back down. However, I always let the market action dictate my actions. If the market continues to head lower, I might just pull the trigger and go to cash. After all, capital preservation is rule # 1. If you fail to preserve capital, you will not have the opportunity to jump into the next big run.
I'll keep you posted on whether fear or greed wins ...
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