With the Wall Street Journal talking about a possible depression and the ominous technical picture I see, it is best for me to be on the sidelines in cash. I have gone to cash in my trading accounts and reduced my exposure to equities in my university retirement accounts and will sell the rest when we get a good bounce. I have lived through many weak markets the past 60 years and suspect that the current decline has just begun. As several great traders have opined, all stocks are bad unless they are going up. Stocks are only worth what someone will pay for them. Value is a myth. When the psychology turns and the masses become scared, they sell and all stocks decline. I prefer to sell early and not get caught up in the panic selling near the bottom. One indicator that has helped me to detect a bottom is when T2108, now at 26%, declines to below 10%. Too many people have made money the past two years and have no idea what a major decline can do to one’s portfolio. It took 25 yers for the market (the Dow) to exceed the 1929 top. So, yes, the market always comes back. No one knows what the market will do and I can change immediately if my indicators tell me to. The key to trading success is to control risk and step aside when the trend is down. Stay tuned….
Thanks for sharing your perspective on what is happening. Supposedly the markets hate uncertainty, we certainly have a great deal of that right now.