The Bears are feasting

You saw a nice sell off today across the board in everything except the dollar and a few selected companies. The Bears went to town. As I explained earlier today the Technicals were basically right on the money if you are looking at charts, know how to read them and are watching the Economic reports. Earnings.com is a good website to see the upcoming events as well as dividend payments. I use it everyday.

The calls I got today from clients we're all the same. What do I do? Most of these people are trading with me and have long term positions in many different types of investments. In reality they have nothing to worry about since most of them own solid companies posting solid numbers as we can see from most of the companies that have reported earnings.

Bonds are a great investment over time. I especially like municipals or muni's as they are know. Reason being is that you have limited risk, you get you principal back and get tax free interest. Now you have to know how to buy Bonds since they all carry different rates of interest based upon the risk. In the future I'll do a post about them. Not a sexy subject but a great investment for the long haul for a balanced portfolio and very important.


I know you're all thinking so what should I do now? First I never tell people what to do unless I'm doing it for them. I post to educate and help you take control of your Portfolio. With that always in mind I can tell you what I would do but that might not be right for you. You have to make that decision. I can only show you what I look at and you have to put the work in to utilize the tools. They are never always right.

My belief is that we will see a further sell off tomorrow after the unemployment figures are released. Could be as much as today. That's when you start to look at what has been sold the hardest and in what sectors. You have to look at the strongest companies if you want more safety since that's where the traders will move into first. Then you have others that are smaller and are typically carry a higher risk. They are volatile. That is measured by what's called Beta. Any stock with a Beta of 1 or less carries the same volatility as the market. Over 1 carries more volatility.Just look at the stock you're looking to buy and see what the Beta is. That tells you how fast it moves relative to the market.


You can look at something like MGM, GE, AA, LVS, F, FITB, AAPL, AMZN and possibly some of the steel companies once things sell off enough. Now I love when you have opportunities in the markets like this since they typically move up quickly. That also signals that the market is some disarray and unable to pick a direction. That's when charts and reading through economic/political info. becomes even more important. Even with all that you can still be wrong on your timing but if you apply some common sense you will be right fairly quickly. Look for low RSI and read the candlesticks on 1 ,3 and 6 month charts. The shorter the duration on the chart typically the more accurate it is on the short term. The dailies help pick the entry point during the day but that's a whole different ball game with the same principals. Below is a link for a starter book and a good place to start.

Dollar cost averaging is so important. My plan is to buy a little if everything looks the way I suspect going into the close tomorrow but I'll cross that bridge when I get there. Every plan needs a plan B. We shall see what that brings us but in the meantime realize the world didn't end and you're worried about a particular position then post a question or comment.