It’s been a great run during the past three and a half months, but we’re starting to see signs that this uptrend is losing some steam. Many leading stocks, for instance, have stalled out in recent weeks, and during the past few days, some are breaking down. And our Two-Second Indicator is giving off some worrisome readings, thanks mainly to the big rise in interest rates of late. None of this is to say the overall bull market is over. Not at all! Both of our trend-following indicators are still in good shape, as are many stocks. But we will say that the risk of a real correction (one that lasts more than a few days) is growing, and thus, we think it’s prudent to pull in your horns a bit. In tonight’s Letter, we’re doing just that, selling half of two of our stocks, and placing two stocks on hold. The result will be a cash position of about 30%, and we have tight stops on a couple more of our stocks. We’re not defensive, but good investors make good gains ... and find a way to keep them. So we’re doing just that. Also in tonight’s Letter, we highlight some stocks to consider on page 4, and write about some tactics on doing post-analysis of your trades on page 5 ... including some lessons we’ve learned this year.
