The Trend Is Your Friend

One of the handy tools for investing is the rule--"The Trend is Your Friend." The easiest time is make money is when the market is trending up. Dips and corrections are buying opportunities because higher prices are ahead. The same rule works in reverse as well. When the market is trending down, then it really is a good time to enjoy the summer and to go fishing. The market will not reverse course , no matter how much you might hope and pray. It's going to go down until selling pressure is exhausted. This was the condition last year between April 26, 2010 and July 1, 2010. There really wasn't much going on in the market, except for lower prices over time.

From what I can tell, the up trend since March 9, 2009 was broken today on a weekly chart. When up trends are broken, they tend to fall to some lower level of support. The up trend began at March 9, 2009, dropped again on August 27, 2010, and now seems to have dropped below this weekly trend line for the first time. I'm not feeling particularly bullish right now. There are so many fundamental reasons for prices to fall further--the end of Quantitative Easing on June 30, the debt crisis in Greece, the uncertainty surrounding an increase in the federal debt ceiling, the falling real estate market, the poor jobs report last week, budget problems at the state and local levels, the maturity wall federal debt will hit in 2012, etc. You get the picture.

Anyway, these are good times to just sit back and watch the market do its thing.

Today, the S&P 500 Index closed @ 1286.

I left the C Fund @ 1300.

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