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It's Time to Take Money Off the Table: Here's Where to Begin


Sell trading positions, buy long-dated out-of-the-money puts, or move into "safer" dividend plays.

MINYANVILLE ORIGINAL Back on June 5, when fear was palpable following a sharp market retreat, I suggested here at Minyanville that is was a good time to buy stocks.

Since then, the market has advanced an impressive 15%. I hope you got more long exposure to stocks back then, and you've enjoyed the upside.

Now, however, it's time to take some money off the table. How so? After all, Europe seems to be stabilizing, and the Fed just announced another round of quantitative easing, or QE3. All of this is reassuring, right?

Maybe, but I see four solid reasons for a pullback here. 1) Insiders are turning decidedly bearish. 2) Investors are turning much more bullish, a contrarian signal. Technical indicators support this, suggesting that the market is toppy. 3) Third quarter earnings will show a lot more weakness than many investors expect. 4) The same market strategist who made the bullish call back in June has turned bearish -- Michael Painchaud of Market Profile Theorems, who has a decent record at calling market turns. "We are now in a distribution phase," he maintains.

So, what to do with your stock portfolio? In short: Risk off.
No positions in stocks mentioned.

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