THE SAFEST PLACE IS IN CASH!!

The end of last week brought another rally that closed the market back above its 10 day moving average. The rally looked eerily similar to the one a couple of weeks ago when I made the last prediction of a move down to 950. We might continue to move up tomorrow...just like we did a few weeks ago. I have to trust the change in the short term trend (close back above the 10 day moving average). In the bigger picture, there are technical divergences that I can't ignore. Each rally feels like a set up for a bigger move down. I will repeat what I have been saying for the last few weeks...the safest place is in cash. This market is killing those that are getting in late. If you wait too long to get in on a rally, you get a big sell off. If you go short after a big sell off, you get a snap back rally. Most technical indicators are showing either a larger sell off coming, or many weeks of sideways price action. Now keep in mind that no technical indicator can predict the future. If you want to keep trading in these conditions, start looking at shorter term trend indicators. Start using a 10 or 20 day moving average and try to swing trade (1-5 day trades) or day trade. The gold trade was a good example. This was a great 3-5 day trade. If you made that trade, I would encourage you to start taking profits off the table. If this rally gains more momentum, you might see gold prices fall back down a bit. If the market rallies and gold continues to go up, it could be another signal for a big drop in the future. Keep an eye on RIMM. I mentioned this one a few days ago. It is sitting on the resistance of the symmetrical triangle pattern. It could break out in the next few days. If it does, it could move up very quickly...just like the gold patterns did. For those that haven't been sitting on the sidelines these last few weeks, please send me some of your success stories so that I can post them on the blog...especially if they were gold trades from my last prediction. I want to make sure we are getting success stories posted.