Market Comment 02 25 10

Yesterday’s advance in the stock market just regained most of the previous day’s losses. This morning the market is off sharply again. All the major indexes are right in the middle of the range bounded by the January highs and the February lows.


We just have to wait and see if the market eventually breaks to the upside and resumes trending up, or if it breaks to the downside and completes a potential topping pattern that started in mid-January.

On average, the Market trends up about 50% of the time, trends down 25% of the time and goes sideways 25% of the time. The moving average trend tracking methods we use for high yield / income / bond funds are of little value to us in a trendless (sideways) market, therefore we switch to a stop-loss strategy involving share price support levels to protect our accounts.

(Click on chart to enlarge it for easier viewing)

 

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