The weekly 1387 level on the S&P 500 was taken out this week (See chart below). Given this penetration, we are now either in a "major correction or bear market." Therefore, our focus will be on sell signals rather than buy signals. Sell signals are the mirror image of buy signals. Our primary bear market instrument is the SDS, which is an inverse ETS of the S&P 500. As an inverse ETS, its price rises when the market (S&P 500) sells off.
Since the market is extremely oversold, we should expect the market to rally short-term. Keep-in-mind that this is not a time to me looking for a major bottom. Don't get sucked in by those pundits who will be screaming that this is a golden opportunity to buy. Prepare yourself mentally to either short the market or purchase inverse ETFs, like SDS. The best chance for the market to make some kind of a bottom, based on market cycles, is around March 27, 2008.
Source: Jack Chan's "Simply Profits"
No comments:
Post a Comment