I know this is hard to believe . . .
but we may have hit a temporary bottom or are close to it!
Technically, we have seen a bullish reversal. I have written multiple times leading up to mid to late September 2015 we would witness tremendous volatility.
If you are a Wealth Maximizer subscriber, you are not surprised and were out of the markets already. If you are a Wealth Preserver subscriber keep reading . . .
It's All Relative
Today, as the markets were crazy with volatility, I was reading and laughing at those in the media. Articles written that liken this to 1987 are entirely out of touch with reality.
The Dow Jones Industrial Average plunged a shocking 508 points — or about 22.6% back on October 19, 1987.
Today's action ended up correcting off of the bottom with tremendous volatility. The government did not even have to step in today with closing markets temporarily. Everything played out and the markets eventually came back and only closed down 3.88%.
In fact, from a technical traders point of view, it was a "Bullish Reversal", not a Bearish one. Nonetheless, there is still room to the downside and today's closing below 15960 confirms that. Keep in mind we don't want too much of a bounce up just yet. That will make people feel it is over and create larger volatility before the bottom is totally in!
We are better off with less of a bounce and some churning down to maintain the bearish attitude. When you have too many media people saying just hold, it is not very good for the markets. It is better to see full blown short term market capitulation and correction to create a solid corrective low.
So, as I have said in the past, do not jump ship in a panic. Everything is relative and 3.88% is not 22.6%!
Proof Is In The Charts
The red lines in the chart below represent Wealth Preserver exit points. The green lines represent Wealth Preserver entry points. As you can see, previous to exit points the markets declined! The same is true of entry points at the bottom. There is always momentum required to kick off a signal.
Historically, the Wealth Preserver is in and out of the markets either 5 - 15% before the top or after the top, the same being true at bottoms. Thus, if this is a true bear market like in 2001 - 2003, or in 2008, the Wealth Preserver will likely protect you from 70% or more of the total decline!
So, Livio, what if it is wrong, like in 2011 chart below?
What you notice is that the market started back up within a couple of months and we reentered the market and grabbed huge gains right up to now. So, when our red arrow bear market signals arrive, they arrive to preserve what you have built over the prior years of a bull market run.
So, we will protect ourselves from most of the decline, if it happens, and let the buy and holders get wiped out. Should the market turn up and reverse as a short term blip, we will capture the gains anyway by getting back in quickly!
So, stay close to your Wealth Preserver subscription and remember this . . . nothing is perfect, I am not perfect, you are not perfect, buy and hold is not perfect, and our Wealth Preserver is not perfect.
But it doesn't have to be perfect to be the best wealth preservation and building tool available.
And that is just what the Wealth Preserver is. The best tool available for Wealth Preservation and Growth.
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Livio S. Nespoli has been a broker, registered investment advisor, and financial publisher since 1985.