There Are Storm Clouds Approaching

At around 8:00 a.m. this morning, I moved 100% into the G Fund. The S&P 500 Index was at 1176.

The storm clouds are here. They are everywhere. A storm cloud is a formation on the market horizon. Normally, when the coast is clear, you don't see these formations. When they begin to cluster together, it is a sign that a storm will follow in market terms. When I see storm clouds ahead, I step aside.

Where are the storm clouds right now?

1. High Trin readings. Trin measures the amount of money going into or coming out of stocks. A high Trin reading means institutions are pulling money out of the market. A low Trin reading means money is pouring into stocks. I like high Trin readings at market bottoms. The storm is directly overhead and will pass away soon. So, that is a good time to buy stocks and to be in the C Fund.

When I see high Trin readings at the tail end of an advance in the market, that means the storm is approaching. It's a sign.

2. Candlesticks and Rice Traders. At this point, I lose Barbara and that's ok/smile. I won't go into detail but just know that when the market closes below its opening price, that storm cloud is Bearish. In other words, prices are going down at least for that day. A low close for the day (the closing price is lower than the opening price) means that selling pressure was greater than buying pressure throughout the day. We are talking about an Alpha Male Storm Cloud.

3. That RSI indicator took a hard dip down today. That is another storm cloud in my grab bag of concerns.

4.Expiration week is here. Tomorrow is expiration Friday. I will avoid the details but it is well known that the week following expiration week is vulnerable to market drops. That's another storm cloud.

5. My Own Psychology. Last night, I was feeling all warm and fuzzy about the market. Alot of other investors were as well. I read an essay at the website Market Oracle about how we were in the middle of a tremendous Bull Run. And then I came to my contrarian senses. When people start to write about how good things are, then it is a storm cloud. It is a signal that more money can be made going the opposite way.

6.Flatlining Blue Bars - MACD Histogram. This is another storm cloud. The market rise is false.

7. Triple Negative Divergence on Stochastics - Yet, another storm cloud.

Conclusion. One could be greedy and try to get the last point or two out of the market. But they say that pigs get slaughtered. I would rather take my profits and sleep well at night. There will always be another opportunity to move back into the C Fund at lower prices.

If anyone has any questions, please send them my way. It is easy to just invest for the long haul and forget it. But being passive is very risky. Why sit through downdrafts and drops in the market? Just a few simple tools like recognizing storm clouds can enhance your yearly returns and add to your retirement wealth.

Later.

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