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Buzz & Banter



Just a quick heads up that one of the short-term indicators reversed down yesterday. The percent of stocks above their 10-week moving average reversed down and is now very close to moving below 70%.

This indicator has reversed down four times now since moving above 70% in May, and each subsequent reversal up has so far produced a lower high.

This is not advice, but the way I typically handle these moves is to begin tightening up stops on existing long positions and preparing for a potential reversal in the intermediate and long-term indicators. There are always stocks to sell in a bull market and stocks to buy in a bear market so I run things in a process-driven approach, not an all or nothing approach.

As we have seen since May, reversals for this short-term indicator do not always result in reversals down for the intermediate and long-term indicators. The point is that the short-term could spill over into the intermediate and long-term, and if it does I want to be prepared.

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No positions in stocks mentioned.

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