What Should I Do Now?

Summary

Sit Tight.
Don't panic.
Think for the long term.

I've been on vacation for a week. We were planning to do a sailboat cruise of the Caribbean and we were all packed and ready when we got a 10 PM email that the cruise was canceled. Since we were all packed and ready for some salt air we called Wild Dunes on the Isle of Palms just north of Charleston, got a 1 bedroom condo on the beach and went on down. I had a nice time and had no problem getting reservations at restaurants we never could get into. We walked the beautiful gardens at Middleton Place and had a few glasses of wine in their bar. The week went fine till the Governor closed the restaurants so we stayed in the condo till our supplies ran out, watched the sunrises and sunsets from our oceanfront screened in porch and walked the beach collecting sand dollars. Now I'm back home in Charlotte and monitoring the market for you.

Back to some advice. Advice needs to be directed to 3 different populations:

25-45-year-olds
45-65-year-olds
The rest of us - retired and 65+

If you are 25-45 just keep trucking. Throw every dollar you can at the market. Fully fund your 401Ks, Profit Sharing Plans, and IRAs. For you, the market is at a great entry point.

If you are 45-65 you need to be just a little bit more cautious. The closer you are to 65, the more cautious you should be. Keep funding your employer-matched retirement accounts, even if you are putting the money in the cash or stable funds --- Do not give up that employer match.

Now for the 65+ group -- the group I've been in for some time if you had followed the advice I've been given for the last 10 years you are probably all in cash. You need to protect your principal, keep your powder dry and wait for the market to bottom out.

My one rule is that I want a portfolio where every stock is trading above its 20/50/100 day moving averages and outperforming the market over the last quarter. I use stop losses at the 100-day moving average for individual stocks and stop losses on major index ETFs at the 200-day moving average.

Where are we now??? The market, in my opinion, is irrational and in decline. Where it bottoms out is anyone's guess so all we can do is monitor the moving averages and hope to get in again at a great price.

Below is a chart of the S&P 500 index showing the Trend Spotter and the 20, 50, 100 and 200-day moving averages. Looks obvious that we still haven't bottomed out.

(Click on image to enlarge)

Barchart's Opinion Trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 10 minutes and can, therefore, change during the day as the market fluctuates. The indicator numbers shown below, therefore, may not match what you see live on the Barchart.com website when you read this report.

Reread my Summary Point at the top and stay rational.