The major stock indexes enjoyed another modest recovery bounce today, this time on mildly higher volume
Officially, the Dow Industrials rose 1.1% on NYSE volume of 5.4 billion shares, while the NASDAQ advanced 0.9% on 2.5 billion. The leadership profile remains weak, though remains positive for now, with 157 stocks making new highs versus 57 making new lows.
The short term momentum oscillators remain negative, confirming the now BEARISH stance of the AlphaKing Trading Indicator. We have new trades below to exit all longs and to begin accumulating short positions (or inverse ETFs) using a dollar cost averaging approach.
The AK Trading Indicator has signaled an official change in trend from up to down, and we are acting accordingly to adjust our trades in-line with the new trend. Risk remains high that the stock indexes will rally further to test their 50 day moving averages (blue lines in the charts below,) so we continue to hold a lot of cash that we expect to put to work as any continuation of the rally unfolds.
Only those investors who understand and accept the additional volatility trading short and inverse ETFs involved - especially on leverage - should consider entering these new trades, with more conservative investors best served following the text advisory we offer to 401K investors. Feel free to email us via the contact us page at AlphaKing.com with any questions you may have on portfolio positioning, or any other topic.
401K investors should move ALL monies to a money market fund, and stay there till the trend turns bullish again.
The Index portfolio will be ¼ invested in the inverse ETF QID tomorrow, which will give us a 50% exposure to the short side. Expect more trades over the next few days.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.
