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JimVanMeerten (62.19)

Why no sales?

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July 27, 2011 – Comments (1)

Just a word of caution.  I know you haven't seen any major sells in our portfolios lately.  The market has seemed to hit a bottom and has some support.  Please look at the Trend Spotter and 100 day moving average on the Value Line Index.  The Index is an arithmetic index of the 1700 largest stocks and in my opinion is the best stock market indicator for the individual investor.


Don't panic.  Follow the Barchart technical indicators on the stock you own.  Have stop loses in place that are in your comfort zone.  If they trigger sit on the cash.  Sit back and sip a good single malt scotch.  Enjoy life.
Jim Van Meerten is a Marketocracy Master

1 Comments – Post Your Own

#1) On July 27, 2011 at 12:41 PM, leohaas (32.07) wrote:

The term "support" is one that comes from Technical Analysis (TA). TA no doubt has value as it all boils down to psychology: in certain situations, people react more likely in one way than in another. This extends to buying and selling stocks and bonds. It is this level of predictability of human behavior that forms the basis of TA, and hence of the term "support".

Right now, we are getting into uncharted territory. The whole debt ceiling thing and the rumor of downgrades of US debt by ratings agencies really is something we have not dealt with before. Therefore, the outcome is unpredictable and TA cannot yield any advantage.

Even if in hindsight we compare this event with the Y2K hoopla, increased volatility is a given. So if you follow Jim's advice, count on your positions to be stopped out.

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