In the MidWeek Video (12/14/22), I discussed that the major indexes were in a range, and I didn’t have strong conviction which way we would move out of this range. I preferred to remain defensive and let the market prove itself before increasing exposure. Unfortunately for the bulls, the major indexes (SPY, QQQ, DIA and MDY) gapped below their respective 21-day EMAs, and the Russell 2000 (IWM) gapped below its 50-day moving average.
This is just another reminder to stay defensive. In recent webinars, some members discussed that they were fully invested (or even on margin). Now is not the time to be a hero. I prefer members keep at least some cash to 1) Help deal with this higher-than-normal volatility and 2) To have funds available for the new leaders that will emerge from this bear market.
Today, I reduced my exposure from approximately 30% invested down to 20%. If any of my positions close below their 10-week moving averages tomorrow, I will reduce even further. As you know, I always encourage members to make decisions based on their own timeframe and overall investment objectives.
Again, staying defensive is best right now based on the poor price action of the indexes and the stocks on our watch list. Many of the stocks I’ve been observing continue to get sold into any strength, and we need to see this pattern change before any SUSTAINABLE uptrend can be expected. If you have any questions, you can ask them during the next webinar which will be this Saturday, December 17th at 11AM EST.