Move 100% into the C Fund

It is a good time to buy.

Having said that it is a good time to buy, there are three ways to play the opportunity. One could move 100% into the C Fund today. End of story. Another approach would be to wait until Friday morning and move 100% into the C Fund.

Why wait a day?

Even if the market is going up, there will be a down day. Markets don't go straight up. They first surprise everyone by going up (yesterday). This move is known as the impulse wave or Wave I. Then, the market steps back a bit to gather strength for the next move higher. Nicholas Darvas talked about this behavior back in the 1950s. Remember, there is nothing new in the market. Two nights ago, I was showing my daughter a chart of the Euro Dollar. She is all of seven years old. I asked her what did she see. She said, up, down, up, down, up. I pulled up a 5-minute, hourly, daily, and weekly chart of the Euro and she said she saw the same thing. And that was the essence of successful trading and investing. Yesterday was the up. Waiting for the down is smart. I think it will be tomorrow but it might be today. These are quibbles in the long run.

A final strategy would be to buy when the S&P 500 Index hits 1192 or thereabouts. 1192 is solid support. The market will not hang around that level for long. So, be prepared to move 100% into the C Fund without delay as the market approaches support @ 1192.

There is a technical reason for anticipating a down day today or tomorrow. Remember how we had a super low trin reading yesterday? The closing trin was 0.26. In 80% of the cases where the trin closes below 0.65, the following day is down. There is a slight halt to the rally and a slight reversal. This pattern only makes sense since a closing trin of 0.26 meant that everyone was all in, as they say in Vegas. The market is primed for a subtle move lower.

Remember these are probabilities. Given market conditions, you can make your move today, tomorrow morning, or when you see the S&P 500 Index hit the 1192 level. The choice is yours.

I would be remiss if I did not put on my worry hat. I continue to nurse the contrarian opinion. I am cautious because of the behavior of Commercial Hedgers. Commercial Hedgers are institutions. They are in the business. They are the ultimate Smart Money. Since the August 25 rally, the Commercials have been showing less and less interest in this market. The Commercials will be proven right, ultimately. If the market continues to rally while Commercial interest declines, we know that the time to sell and go short is in the future. But that's the future.

For now, its a good time to buy.

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