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Tuesday, October 7, 2008

When to Buy Stocks or get out of the market

Long term trading signal.
Before I started this blog, I emailed a link to a video, shown below, giving when is a good time to buy and exit the stock market using an independent indicator. Click on the chart for a detailed look at SPX with 20/50 week moving averages as of today, or click here for latest bigcharts.

The market may rally, but in my "free" opinion, DO NOT BUY into the stock market currently! The US Stock market may be over-sold but the fundamentals have not changed, and we will continue the downward spiral.
The "green light" to get back into the market is when there is "talk" or a law passed to have the USA follow international accounting rules to regain trust in corporations. Until then, throwing money at companies that CANNOT be properly valued will not regain trust, and therefore credit lending will remain impaired.
In any event, I strongly recommend following the indicator explained by "The Ticker Guy" in video below.

UPDATE: 8/19/09 : Crossed in upward direction. I STRONGLY recommend CAUTION in this market to follow this timing tool in earnest

UPDATE: 5/6/10: I was outright wrong to indicate caution with this indicator on 8/19/09. Please click here to see my comments. This indicator needs to be respected.

UPDATE 6/13/10: Two other excellent long term indicators to read about.
Over at Slope of Hope, article laying out numerous trading signals similar to the one above. Click here to read article "A simple Long-Term Trading Signal"

Blogger Mish wrote an EXCELLENT article detailing using bond interest rates as an indicator when to exit markets. It serves similar purpose as Karl's timing mechanism.



6/24/09: Mish writes two blog entries detailing why buy and hold (1) investing in the market has always been a losing proposition(2), and an makes the case that peak earnings in the US has passed.


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