May 3, 2013 Leave a comment
My post of 4/18 called for a market that appeared to be rolling over. Here we are a little over two weeks later at new highs in the S&P, Dow, and Russell 2000. The market essentially has gone straight up since my post.
Here’s another example of how letting our stops tell us whether the market is really rolling over or not is the best strategy for letting profits run. If our stops are set just below logical support levels and they don’t get triggered then we are assured that we are just seeing ghosts in our predictions of a lower market.
I had a few stops triggered in accounts, but very few, and mainly related to poor earnings. The markets response to earnings has been really surprising in that most companies got a pass for flat or lower revenues as long as the bottom line didn’t miss.
So, things seem to remain generally buoyant for as long as our Fed continues to provide liquidity and the job market doesn’t collapse. Until then, staying invested but moving stops up to rising support levels seems to be the best strategy.