This is a free sample of the actionable strategies we provide to our Premium Members.
The S&P 500 continues its struggle to bust through previous highs in a significant manner. If and when it does, it will mean we are going higher, in my opinion. We are up 38% since our last buy signal. The major risk level keeps moving higher and is currently around 1450. The closing for April 30, 2013 was 1597.
Stay the course as there is more potential upside. The biggest risk is not a 10% correction. The biggest risk is a 30% to 50% correction. I will tell you when to either sell or begin to leg out to avoid the big risk.
Let’s check on a few of the ETFs we’re tracking, as well as AAPL
QQQ … We are up about 3% from the buy signal in March. Daily closing has eclipsed the previous high close from September 2012.
GLD … Too volatile right now for my tastes.
AAPL … We are down about 1.5% since our buy signal from March. As I discussed previously, this trade is not for the faint of heart but if you like AAPL you must pick an entry point. I pick my entry points based on my exit points. This way, I know how much I am risking.
iShares MSCI Emerging Markets (EEM) – weekly chart
EEM … We got the pop off the lower trend line we were looking for which confirms support. I discussed this happening in our last update. This has triggered a buy signal for EEM. If you buy here your risk is around 10%.
iShares China Large-Cap (FXI) – weekly chart
FXI … Very nice pop off the lower trend line. Again, I discussed this a couple weeks ago. This has triggered a buy signal for FXI. Risk is below the trend line at around 9% if you buy.
Trust Price Movement, Not the Evening News
I can’t tell you how many people have told me they got out of the market at the beginning of the year because they thought that sequestration or something else would spook the market. Well, they just gave up 12% of gains in four months. I would suggest reacting to price movements not predicting price movements.
If I told you that you have a 50/50 chance of being right in buying a stock and your risk is 10% every time but your reward is 35% every time would you think that is good? I’ll give you the answer: it’s really good. If the trades were “available,” I would trade as often as possible.
I’m currently doing research on developing a more compressed time frame model that would trigger buy and sell signals more often, using the same concepts and strategies I use for long-term investing. It’s all about risk management. Please take that to heart.