The market is in an exciting Case 4 Bull Market Scenario in which earnings, inflation and interest rates are rising. This information is published each week in the Climate Section.
The Truth Chart, explained in my essays of March 21 and March 28, 2003, indicates that this is the scenario in which Bull markets end. Yes, the Bull market will end if inflation and interest rates keep going up, but you do not need to panic and sell all your stocks. But stock prices are crashing and my hard earned profits are evaporating. What should I do?
Look, if you had known about the Fifth Secret to Making Money with VectorVest, you would have already protected your profits by selling Covered Calls and buying Put Options. Hey man, don’t yell at me, help me.
OK, the first thing you should do is watch the latest “Special Presentation” on “The Seven Secrets to Making Money with VectorVest.” Here’s how to find it: Click on the Views Tab. Click on Views in the Views Manager screen. Type Seven Secrets in the “Text to Search for” box. Click on Selected Sections; then click on Strategy and Search Views. Three presentations are returned.
I clicked on each of them, just to check them out. Lo and behold, the one dated 05/01/2015 was titled, “Using Secret #5 to Protect Profits.” Here’s how to access it: Click on 5/1/2015. This takes you to the Strategy Section of the 5/1/2015 Views. Click on the lower case click here. This takes you to the VectorVest University.
Click on Special Presentations. Click on the Drop Down Arrow next to Videos Per Page. Select ALL. Scroll down to 05/01/2015. Enjoy. It shows you exactly what to do, but it only scratches the surface. You also need to know when and how to place the right trades.
I still suggest that you also watch the “Special Presentation,” presented on 1/13/2017. Pay particular attention to Secret #6, “STAY INFORMED.” Had you done so, you would have been reading the Strategy Section of these Views.
On Friday, January 12, I noted that the BSR and MTI had gone into nose-bleed territory and at 1.53 the MTI traditionally begins to top out. I also said the three bearish 1-Day Derby Winners was a sign we shouldn’t ignore.
On Friday, January 19, I wrote, “While the Price performance of the V V C is flat-out bullish, our Buy/Sell Ratio, BSR, and Relative Time Indicator, RT, aren’t going along for the ride. Our Market Timing graph shows that the BSR closed the week down since last Friday, 01/12, while the Price of the V V C closed higher. This is a bearish deviation which often signals trouble ahead, somewhat like a Canary in a coal mine.”
I was totally skeptical of the euphoria I saw on TV and looked for hard data, a factual warning sign of a downturn. I found it and wrote, “Ah ha, if one adds the BSH% data to the Market Timing graph and removes the other indicators, they could see that the percentage of Sells is near a five year low. A very low percentage of Sells invariably presages a downturn. So let’s be careful here, but enjoy the rally.” I also wrote that downside risk exceeds upside potential.
On Friday, January 26, the Price of the VVC closed at another all-time high. I acknowledged the bull rally, but also said, “Let’s not get carried away here. Whenever the percentage of Sells is as low as it is now, below 8%, there’s a pullback. So enjoy the rally, but continue to be careful.” I also repeated my warning that downside risk exceeds upside potential.
So the downturn finally began this Monday. It was triggered by fears of higher inflation and rising interest rates, which are a part of a Case 4 Bull Market Scenario. Outgoing Head of the Fed, Ms. Janet Yellen, was kind enough not to raise the Federal Funds rate after Wednesday’s Federal Open Market Committee meeting, but she and everyone else on the Fed’s Board of Governors knows that the economy is cooking along and it will lead to several interest rate hikes this year.
When will the Bull market end? The answer is that will happen when it is perceived that corporate earnings are falling. The good news is that earnings are rising very nicely right now, so the Bull Market Scenario will prevail for a while. But you can’t waste any time.
There’s no need to let your portfolio shrink in a correction. Learn how to protect your profits. Watch tonight’s “Special Presentation” and learn how to trade Options. It’s the Fifth Secret To Making Money With VectorVest.
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