See this post per what we could be dealing with….again!!! (see post here) This post shares why I felt that “risk was as high as anytime in my 31 years, back on 5/14″
Markets have moved closer to the info shared in this post versus further from….I attempted to share on 5/14 that investors should respect the situation at hand…..now I am of the opinion it should be respected even more!
USIKPA….Great question and Thank you!
we harvested at the top of the wedges, up against Fib resitance weeks ago. Most define risk as a “market decline” and their is nothing wrong with thinking that way. When building a portfolio I define risk by “how many assets do you own that have a high correlation factor?” Right now the majority of assets around the world are moving in “lock step with each other!” That is why I have been attempting to share that risk is high, due to if one support line breaks, most likely they all break! Where does one hide if diversification doesn’t help?
Is building a portfolio a black and white issue or shades of gray?
Your question was… “How does one go about learining to harvest?” Check out the link below and look at the lists of posts that have been suggesting for weeks to harvest and reduce assets at risk
I am not into labels…yet I discussed “Deflation/falling prices” was at hand clear back in March. see link below
What was wrong with most investments in 2008? NOT A THING…. unless you owned them. I remain of the belief times come along in our lives that “harvesting/capital protection” is a good idea and it looks like one of those took place again.
Harvesting doesn’t mean some giant bear market has to happen either…just moves to protect capital from time to time. I don’t believe we should be a “bull or a bear” see post below per that line of thinking.
Dear Chris, very nice and telling charts
General question: how does one go about learning to harvest from these? You kind of keep telling that these are NOT definitive signals but then … what are these?
Aaron….Euro/dollar spread, euro at the top of its trading range, high yield break downs, basic materials acting weak….to me these are more of sign of how to weight a portfolio than the 200 SMA line. Are MA’s important to me? Yes. More valuable of a tool per how to invest? No for me. The rising wedges had us harvest weeks ago…200 SMA now become a point of interest, not a tool to make a decision.
Andrew….a ton of money trades on this line in the sand…. Doug Short discusses the “Ivy” strategy, which reallocates based upon this line. I think it is great to know, yet I am more interested in harvesting or scoring long before this siganl/trigger goes off.
Does the sharp intraday reversal off of the 200 MA (1257 on S & P) carry any significance?
From here, a 1-2 day rally then lower prices is not out of the question.
If the 200 MA proves to be support, then do you feel that much higher prices (>1300) will be forthcoming?
Based on your posts for the last couple of weeks, the market should move much lower than 1257 (200 MA)
DO you agree?
i know you look at charts a lot, but i see many indices are resting on their 200 day MA. How much support or respect do you put in that indicator?