What will placate the sellers? Probably Dow Jones 6000. That is almost 1200 points down. We are oversold right here but we were oversold at the opening, as well.
Markets always over shoot in both directions. So, the DJ 5300 call made earlier today by one of the pundits I listen to may not be far off.
If you still have long positions and refuse to sell, for whatever reason, then you should own some inverse ETF’s. Here is a long list. I own TWM but would be happy with many of these, as well. A List of Inverse Mutual Funds and Inverse ETF’s That Seek to …
Stops should be used with inverse ETF’s, just like long positions. So, should you buy TWM, for example, at the last sale of $89, you could set a sell stop 6% lower (an example only) at $83.65. And mark it GTC, Good ‘Till Cancel.
If the bulk of your assets are in 401k’s, IRA’s or 403b’s and your list of options does not include being able to buy individual securities then you should sell something. As stated here many times you will be unhappy on days when we get rallies. But you will have time to change your allocation when as and if we get a sustained uptrend. You can get back in with the click of a mouse.
