Sometimes it can pay for investors to put their money in a “Shoe Box” (not have monies at risk). If investors had put their money in a shoe box in 1929 (prior to the Dow declining 90%), 3 years later they would have had a 900% gain in purchasing power! The equivalent of 100% gains in purchasing power would have been the result of putting cash in a shoe box during the broad market declines from 2000 to 2003 and 2007 to 2009! How can that be? Check the math (See table here)

Back in May I shared the chart below, reflecting that two credit based indicators were very close to giving a sell signal, suggesting to put monies into a “Shoe Box” (see post here).  These indicators suggested to put monies into a Shoe Box/protect capital back in 2007 and they looked to be sending the same message again.


“Shoe Box” sell signals don’t happen very often….The “Shoe Box Indicator” is a great tool for investors that don’t care to make allocation shifts very often, such as 401k plans that have trading restrictions and a great tool for those wanting to have a macro feel of the equities market.  

 I put together the above chart to show that a small decline in these indicators would create the first “Shoe Box sell signal in 4 years!  Not only was a Sell signal close at hand, the 500 index was up against its 23% Fibonacci resistance level, as it stood at 1,340.

 Below is an update on the Shoe Box indicators… 


Major wall street firms seem to discourage investors from protecting captial or attempting to have purchasing power increases.  A nice purchasing power increase has taken place since Mid-May for anyone who stashed some hard earned monies into a shoe box. 

Somewhere down these line, these sensitive indicators will suggest to take monies out of the shoe box and place them back at risk!  One of them is close to sending a buy signal, the other has some work to do before doing so! 

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past