Tuesday, July 31, 2007

Topping Action

This is what topping action looks like. One day/week the market makes you panic, the next day/week the market makes you feel all warm and cozy.

When I talk about topping, I'm never really sure how long it will last or how long the resulting correction from it will last either. But I do know one thing is for sure, this is not the time to be overly exposed to equities.

If you still have stocks acting well, then by all means hang onto to them, but keep a close eye out for any new or additional sell signals. If you're in cash, then just wait.

Even if the market were to follow through into a new rally this week, we would most likely be several weeks away from seeing a mass amount of breakouts develop. And any initial leadership would be narrow and limited in it's ability to carry the overall market higher. There was too much damage done during last weeks sell off to recover quickly from.

Good luck.
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