Market Update – Mar 2014

The SPY had made a high price of 188.96 on 7 March 2014 which created close to a 10% separation from the 200dma. What follows was a market pullback to close a portion of that space. Remember that we are towards the end of the market’s 5 year up cycle and could begin to see a significant pullback any time.

For those of us that own stocks be mindful that we cannot purchase stocks unless we are properly hedged with a Put option. I have shared this technique in our trainings.

Remember however that we have been enjoying these share price movements to the upside because the overall market’s direction is to the upside. As long as the SPY is trading above the 200dma (daily moving average) we know we can purchase stocks (and still be hedged).

However once the market closes below the 200dma I myself will not be looking for purchase stocks since I don’t want to buck the direction of the overall market.

However realize that when this next market consolidation takes place we will have so many new potential buy candidates and we can see some unprecedented returns owning the stock.