Investor Spotlight

30 Year Anniversary Of 1987 October Market CRASH !!!

I still remember that Monday in October of 1987 when the $DJI dropped -22% in a single day. My portfolio was down by -40% by the end of the week. I was too naive at that time to put my trust on people that were handling my money. It was a very painful event. I have since than learnt to recognize the warning signs of imminent worsening market conditions. Knowing what to look for helped me save my portfolio during the market correction in the year 2000 and 2008. In the process I also learnt to recognize the signals of the market rally. IBD (Investors Business Daily) identifies this signal as a Follow Thru Day. Once you acquire the skills of reading and understanding the stock charts, you as a retail investor/trader will avoid a market crash. You will also learn to TIME the market and enter the market just at the right time.

My Market Outlook

I still have a bullish bias towards the market. I did not see any data last 2 weeks to suggest that we would have a market crash in October this year. I hear remarks from other investors who can't believe that the market is not going through a major correction. So many investors are fearful and scared to be in the market. They are being defensive and listening to what some of the market "GURUS" spout out on media. Going by your feelings about the market or your biased opinions can be very misleading. Data is what really matters.

Currently we have 2 distribution days with the major indexes of $SPY and $NASDAQ. The famous crash in 1929 had piled up 9 distribution days and the October 1987 crash had 11 distribution days. That is the data. Market is also in a confirmed uptrend. This is a signal that suggests to retail investors to initiate stock purchases. Currently I have 75% of my portfolio invested in the market. There have been quite a few stocks popping up from their bases all summer long. Most bullish quarter of the year started 2 weeks ago. This week we have some major financial and transport names reporting earnings. Institutional investors account for 75% to 80% of the daily trading in the stock market. They ultimately decide the movement of the stock. Controlling losses and harvesting profits with the use of trailing stops is a good strategy to follow.

Where Are We Headed

We had a Follow Thru Day on election day Nov 8th of 2016. That was the signal to enter the market. We have not had a -5% correction since the election. The following 3 major indexes have been closely following the 8 day ema(exponential moving average) on a weekly chart for the last 11 months. That data suggests the bullish stance of the market. Here are the performances of the major index. I have highlighted the range in parenthesis what I view as the direction of the market in the next 2 weeks. It is not a forecast by any means. Monitor the market daily and make appropriate adjustments on your stocks with trailing stops.

$SPY ... +17.80% (250 - 260)
$DJI ... + 21.35% (22,500 - 23,300)
QQQ ... + 28.00% (144.50 - 152)

Update On 9 Stock Positions

There were 9 stock positions initiated in September to roll out profits that were harvested from the 10 stocks that were closed out. 3 of the stocks had losses of -4% and the trailing stops helped to mitigate greater losses. Following are the results and they are still managed actively with trailing stops to capture more profits.

$YY (9/5) ... +25%
$PAYC (9/18) ... +6.52%
$CGNX (9/22) ... +5.81%
$LRCX (9/25) ... +11.0%
$CTRL (9/25) ... +9.53%
$AMAT (9/28) ... +10.42%

Lesson to learn here is to maintain losses no more than 1/3 of what your profit target is. This way you can lose on 3 trades and make profit on only one position and your portfolio will not suffer any draw downs. You will sleep better at night knowing that you have stacked odds in your favour.

Mentoring Program

You have seen the results of all the trades and stocks on my watch list all year long. Whats holding you back from taking control of your portfolio? You as a retail trader and investor have a much better control over managing your own portfolio than what the institutions can do for you.

Would you like to learn:

How to read the signals that the market gives you so you can mitigate losses and profit when the market gives you a very clear signal to enter the market.
How to consistently Outperform the Market like I have shown you. Buy the growth stock, at just the right time and sell them with precise Trade Plan in place for Loss Exit, Profit Exit and Time in the Trade Exit.

Schedule a FREE 30 minutes of "Discovery Call" with us to see if you qualify for our program.