…an independent advisory firm building wealth with active portfolio management

Forced to sell at the bottom 220929

Today I did something that I NEVER like to do…I was forced to sell, at what I believe is likely a Market bottom.  I won’t list the entirety of what I sold, it was approximately 30% of my portfolio.  The stocks I sold were generally the frailest.

I say “forced” to sell, because my gut instinct is to hold; however, today’s price action triggered a predetermined long term “tripwire” that I use as a “line in the sand” that can’t be crossed.  Rule based logic outweighs emotion.

The tripwire is also being reinforced by deteriorating conditions overseas- sabotage to the natural gas pipeline under the Baltic Sea; UK pension fund panic; and growing concern about Emerging Market currency crisis due to the extreme strength of the US Dollar.  I continue to believe the overall status of the US economy is resilient, but these externalities might prove to be a stock market “Lehman Brothers” type event that would breach support at the 4 year moving average.

I still anticipate a bounce off this double bottom low; however, if my next tripwire is triggered, I’ll take more chips off the table.

This is not yet a time to panic.  A 2023 mild recession is already priced into the Market.  Corporate profits are being adjusted down, but they’re still strong.  Any “good news” type headlines will likely drive at least a short term rally.  Conditions are forming for an excellent opportunity to swing trade between what will likely be a long term range bound market.

As always, trade with caution.

If you find these ALERTs informative, please share them with a likeminded friend AND reference this post on your website or social media channels.