1 26 08 remain in the bond fund.
stockcharts.com
above is the list of funds that are available to us in our 401K plan at peabody
In almost every case the charts are black and have moving averages, red lines lines over the blue lines, which is the signal to exit stocks.
In almost every case the long term up trend channel has been broken and we are now making lower highs and lower lows as we move down within the new down channel
I have marked the down channel with two red lines on all the charts.
I have also added a blue line where I thought the bottom may be if the decline got under way. If you will notice that in most every case price is now at the bottom of the down channel that is marked by the red lines.
Price in most every chart on the link above is also near the blue line where I thought the decline would have its first bottom.
SO HERE IS THE CATCH, officially this is a long term site, set up to trade very few times and to catch the major moves and not to try to catch every wiggle.
I am not good enough to catch every wiggle or is anyone else for that matter, it just cant be done.
So here is the problem, if this market continues down for an extended period of time, like say 3 years or so, it will be impossible to make any money in mutual funds during this time as they will all continually to move down, All the funds that we trade are mutual funds.
There will be rallys, but they will never make new highs but they will always make new lows. Thus in the end your account will continue to go down over the long haul.
Only Bonds will continue to go up over the long haul if the market continues to go down for an extended period of time, and this is no garantee, they could go down hand in hand, but I would think that unlikely.
We are fortunate that we have missed the down fall in stocks as the call to go to bonds on 11 10 08 was a great call and we are up a few percent while others are down several percent.
If you are just starting to view this site, DO NOT GO TO BONDS AT THIS TIME, but wait until a new change in recommendation is giving.
We are currently 3 months on the Bond fund and may go for many more before a recommendation to change funds.
All this brings up this case. The other way to make money in a down market is to try to catch a rally in a bear market.
This is very risky because you are trading against the trend which is now down.
So traders may wish to try to make some money by trying to catch this rally. Remember this is risky and may not be for everyone.
The rallys will come off the lower line of the down channel, we are currently near this area on most all the charts.
Also many of the funds are at the blue line where I thought the bottom may be for this down move.
The blue lines where placed not randomly, but measured from the formations of the head and shoulders and double top patterns that are on all the charts.
stockcharts.com
stockcharts.com
The blue line is the expected bottom.
So for those that may wish to try to profit form this up move possiblilty, it is now about time.
The fund below would be my choice.
stockcharts.com
it is a small cap and has lost over 50% of its value during the last 6 months or so. Hardly a selling point to a new investor.
But look at it like it is now on sale as it is the most oversold and the most likely to have substancial upside
do not fall in love with this selection as it is only a recommend counter trend trade canadate.
Anyone interested in this type of trade may want to meet there risk needs. You dont have to be 100% in it.
You may want to sell 1/3 on the bond fund and try moving it to this fund in hope of catching a counter trend rally, and maybe if you are luckly maybe catching a major bottom.
Sell the amount of bonds that fits your risk tollence. You may wish to try a 50/50 trade.
But offically the call is to stay in the bond fund. It is less risky than a counter trend trade.
I will up date each week for anyone trying the counter trend trade. |
