Watching and Waiting

It's an interesting time for the market right now. The Market Timing Tool (MTT) has definitely signaled a short-term top. It fell significantly over the past three days. On the other hand, the $BPNYA signaled a buy earlier in the week for long-term accounts.

A long term trade is triggered when the $BPNYA crosses the EMA30 from below as it did on December 11th. I will usually go long in my 401k when this occurs but held back this time because of the fiscal cliff talk going on. The last thing we want is to go long and then have Congress not get a deal done and have the market crash.

As it stands right now, my 401k is in cash and I'm in SOXS at the moment. For full disclosure I also went against the MTT and bought NUGT on Friday. NUGT is a beast of it's own but I usually still follow the MTT with it. On Friday I decided to take a small piece of it based on it's chart and how it's performed lately. We'll see what happens.

I'll have a follow up post with more detail on how I trade my 401k using the $BPNYA and other charts.