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Sunday, July 18, 2010

Market Update - July 7, 2010 - Investor X

MARKET UPDATE
July 7, 2010
Investor X 


The market appears to be much closer to the end of the current upward correction than it is to the beginning of the correction. In my opinion an attempt to sell out short positions at the beginning of the correction would have been problematic because, as I mentioned in my previous update, that would have necessitated being right on the sell decision and then being right again on the buy decision for such a strategy to work out. The best way to take advantage of these minor upward corrections, in my opinion, is to add to existing short positions toward the upper end of the rebounds. This requires that you be correct only one time.

I am currently taking some classes that are consuming most of my daytime hours. This will continue through most of August and therefore I will not have the time to be as active in sending market updates unless it appears that the market action warrants an explanation or when the markets get close to the end of the current decline. At that point a multi month rebound should occur prior to the major decline resuming (By the way, when you begin seeing a lot of Market Updates, that is probably indicative that a transition is underway. I typically do not write as many updates once the transition has occurred and a new trend is underway). I plan to sell my trading positions and perhaps a portion of the core holdings in my conservative portfolio and all of my short positions in my aggressive portfolio during that transition. The current downward trend should last for another month or more and erase another 1,300 to 2,000 points before it is complete. Then I would expect the next major rebound to begin. For the most part I have bought in the majority of my short positions and therefore, there is nothing to do over the course of the next month or so but patiently wait for the market to do its thing.

Regards,


Investor X




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