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JimVanMeerten (57.35)

Code Yellow - Proceed with caution!



October 01, 2009 – Comments (4)

Just a quick note of caution. I normally only write a market momentum blog once a week but the last 2 days of market action should be looked at. Hear is why I'm cautious:
The Value Line Index, an index of 1700 stocks is presently trending below its 20 day moving average. According to the BarChart market momentum page today 59.52% of all the stocks 6000+ they follow closed below their 20 day moving average. The 20 day new high/low ratio was 414/830 - the first time in a while that there were not more new highs than new lows.

Am I panicking? No! My stop losses are always set at the 50 day moving averages. That point hasn't been hit yet. I just won't replace positions if my stop losses trigger till I see a trend.

What's my advice? You have to make up your own mind. Is this a trend and just the start of the doomsayers inevitable retrenchment or is this just a blip and a good buying opportunity to pick up some positions on a dip? Let's hear your comments below or email to

Jim Van Meerten is an investor who give his financial opinions on Financial Tides, MSN Top Stock Blogs and Seeking Alpha.

4 Comments – Post Your Own

#1) On October 01, 2009 at 6:35 PM, G8BigBoom (65.78) wrote:

I think people have made a great deal of money lately and are being smart and protecting gains. The market drops almost at open and this to ME says people are sitting in front of the computer after work telling themselves not to be "piggish". I am sure the next blog will list reasons why I am wrong but it seems to work for me. I sold my worste positions before THIS drop and went more into PFE. The more it goes down the better. Protect your gains and to everyone else watch for the low. Happy investing!!!!

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#2) On October 01, 2009 at 7:16 PM, Varchild2008 (84.00) wrote:

You are cautious because of some chart techies?

I have already announced DOW 8000 on my blog...

We are about to plunge in October...  Hopefully rebound some in November....and December?  Question mark ville.

My cash is getting stuffed into "foreign equities" right now as a hedge against fundamentals starting to crash on my American based equities.  (although most all of what I have in my portfolio has ASIAN exposure).

CODE =  RED!!!!      BLOOD RED!!!!    From a fundamentals point of view.   The economic picture is not a "Cash for clunkers is over" issue.  It is a "happy days are gone now that Obama's here" picture.

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#3) On October 01, 2009 at 7:18 PM, Varchild2008 (84.00) wrote:

P.S.  As long as Obama OBSESSES  over Health Care Reform Public Option Schemes.....

The war in Afghanistan = LOST

Our Stock Portfolios are going to get obliterated again... *sigh*

and Unemployment will keep rising.  The effect is the same as when Jennifer Granholm became Governor of Michigan.

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#4) On October 01, 2009 at 8:13 PM, motleyanimal (39.38) wrote:

Dang it. Not much happy news here. But I agree that many of us have banked profits over the past few weeks. Of the 4 accounts I manage, 1 global, 1 margin, 2 IRAs, I have gains ranging from 27% to 49%, and I have taken 80% of that off the table.

Give me some markdowns, and a 10% off sale and maybe I'll be in the store again.

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