Wednesday, August 31, 2011

important update

In my last post I suggested that aggressive contrarians should wait until the cash S&P 500 closed above its 50 day moving average (red dash arrow) before reducing the current, above-average exposure to stock to below-average levels.

I had envisioned this happening around the 1220 level in the S&P. The market is currently trading there but the 50 day moving average is 30 points above the market. I think it is better to be safe than sorry, so I think aggressive contrarians should take advantage of current prices to reduce their stock market exposure to below-normal levels.


  1. Hi Carl, in such volatile market I'd recommended using the EMA (Exponential). Today EMA50 is at 1232 on ES. Just 3 points away from todays high.

    I can imagine a top forming for a couple of days before a re-test of the lows.

  2. Carl, there is a sense of urgency in your is obvious that you are turning (increasingly)bearish which have not been seen for a long time.

    Thank you in advance for sharing your insights.