By Ryan McGuire
I'll let you figure out why it is true that a sharp correction is upon us. Remember: divergence in
the indexes is key. In my
view, It's time to take profits and wait. I believe there is a good chance we will test the 13,000 level, which may represent a good place to buy back into your stocks and stock funds. 13,000 represents around a 7% drop by the way. If we break
down through that level, the next stop is 12,542.38.
Hedging yourself against these untimely drops in the market can be as simple as holding extra cash in order to deploy, buying an inverse fund, buying bonds when you perceive a top is forming, buying some gold, taking some profits etc. Now is the chance to make some money as the market corrects if
that's your game.
Will this be the end of the world? I highly doubt it. But I will
be watching for that major support at 12,542.38. If a bottom is formed above
that level, I'll be adding to positions. If the Dow breaks down, a correction
to around 11,300 is well within the realm of possibility and normalcy.
Happy investing.
R
