Saturday, May 21, 2011

Playing Defense

The major US indexes have all pulled back in May. Since April 28th small cap stocks have pulled back the most with a loss of over 4% and the S&P 500 is down a little more than 2%.

While the broad market has been declining the Consumer Staples sector (XLP) has risen over 2 1/2%.

(Click on chart for easier viewing)


We are nearing an area that should act as support for the broad markets. If that support area is breached to the downside the odds of a full market correction would go up. If that turns out to be the case I would become even more defense or possibly even play the downside with inverse ETFS (the equivalent of shorting the market for moderate to aggressive accounts.

This blog post does not constitute an offer of investment advise. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

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