For those investors and traders who caught the 220 point rally in the S&P 500 over the last 4 weeks, think about protecting your assets at these levels. The past couple of months have lead many investor feeling paralyzed by the extreme volatility. At this juncture, holding and praying for the markets to move up is not prudent.
We remain bullish long term, but the short term risks are growing. The biggest risk is Sovereign Debt contagion, which now Italy seems to be the next shoe to drop. That being said we called the rally and told investors to enter the market at 1090 on the S&P 500 back on October 3rd. For our readers on Forbes, we we identified key resistance between 1235.00- 1255.00 (combination of the green M.A. Line and the blue horizontal resistance line) over four weeks ago.
As of last week, we called for a move to 1275.00, and the market traded to 1288.00). We advised both our readers and members to sell 25% of their long positions at the 1275 region after the 200 plus point rally. Once it peaked, and dipped to the 1218.00 region this past Tuesday, we stated to our members, we would like to go long near 1188.00 on a dip. 1210.00 was the low.
Short Term
We missed our entry point and are still waiting. If we get short term relief from Greece, look to sell the rallies at 1288 or buy some PUT protection in this region. For shorter term traders, let's watch for the 21 and 50 Day Moving Average before we get long.
Trades we are looking at
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