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

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

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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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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