How To Tell An Uptrend In Stocks Is Getting Close to Ending?
The stock market typically signals a recession long before the trouble is obvious. According to the National Bureau of Economic Research, the 16-month recession in 1973-74 began in November 1973. However, the Dow Jones industrial average peaked in January 1973, beginning a series of lower lows 10 months before the recession’s technical start.
The bear market didn’t hit rock bottom until December 1974 — about 47% off the January 1973 high.
No one knows how deep and long a correction will go. That is why I am a cautious investor.
How will the individual investor know when to begin selling stocks?
Personally I use moving averages on the SPY and QQQ. More so I count distribution days. Currently we are at 8 on the QQQ. I exited most of my position when we had a clustering of 4 several weeks back. A cluster of distribution days will serve as the signal to start scaling back.
When you trade, you trade your personality. You need to have rules that match your personality and risk tolerances…