A question came in about the Long Term Investor Buy Signal. Read on for the
answer.
Welcome to Lynn T's 1-2-3 PLUS Alert. To learn more about my Partial
Leverage Utilization System, click here.
When I added two new components to my service last week - the Long Term Investor
Buy Signal and the Long Term Investor Crash Warning Indicator, I knew there
would be questions on how to use them to your investment benefit. Here is one
such question (along with my answer).
Q: Lynn, as a new subscriber, my question is this: Without leverage
advice (1/3 etc) is it up to me to decide how much money I want to commit to
this signal? Or does its rarity (2-3 times a year) imply immediate full investment
as per my own risk tolerance?
A: First, this is an investment signal. All we are saying with this
signal is that it is a good time to put any cash that you have been accumulating
to work as an investment.
The signals that this service normally generates (1/3 weighting) are issued
separately. In fact, I'll be issuing a signal to add 1/3 (or even 2/3) bullish
weighting shortly.
However, if you decide to utilize the long term investor buy signals in
another way, feel free. There are many subscribers that incorporate my signals
into their own systems.
If you have a question, feel free to ask away and maybe yours will be featured
in a future article and may even answer a question someone else had, but didn't
ask.
Looking at the weekly chart of the SPY, the bulls have really been battling
back against the bears for the past two weeks. Two weeks ago, the bears could
have pulled prices down to around $120 - yet the bulls wanted to end the downtrend
and held their ground to close the week at around $126.40. Last week, the bears
may have won out in the end, but the candle shows that the bulls were trying
to make their presence known.
The bears appear that they may have one more week of pull left, but the bulls
will have something to say about that. I believe that the end of the downtrend
is here, so we'll adjust our weighting accordingly.
Add 1/3 bullish position (see new weighting below).
Current Weighting Suggestion:
1/3 in Bullish Leverage
2/3 in CASH mode
Long Term Investor Buy Signal Alert Over the past several years, this indicator has predicted several 100-point
or more moves in the S&P. There are only 2 to 3 of these signals every
year, so they're worth paying attention to. This is an ideal signal for investors
to put cash to work following a down move in the market.
A Long Term Investor Buy Signal Alert was issued July 23, 2008.
Long Term Investor Crash Warning Indicator This indicator is a variation of the widely published Hindenburg Omen. We'll
let you know when we're seeing indications of a potential crash to come. This
would be a good time for long term investors to take some money off the table.
This indicator is not coming into play at this point in time.
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