Indicators Pointing Toward Defense : Be Cautious

by | Jun 15, 2008 | Asset Management, Point and Figure

The indicators flipped to defense this past week.

What does that mean?

Well for many of us, we have a LOT of money already in cash. so we’re properly positioned. But now what?

This is where knowing the game plan comes in handy. The average length of time the market is on defense is typically around 60 days. Sometimes shorter, sometimes longer. The previous turn on defense was much longer than 60 days.

Additionally, the sectors that have been performing really well became pretty well overbought. So this is a pullback that will give us a better entry point.

It’s tough sitting in cash, especially when cash pays practically nothing. But look, it’s better to lose an opportunity — than to lose money.

I’m building my shopping list now and we will be ready to pounce over the next few weeks, as soon as the indicators tell us to do so.

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