Careful and don’t be fooled by one day.

Even I wondered if maybe yesterday (Tuesday), was finally going to be the turning point and the market would finally start climbing. I didn’t hear or look at any news, so I do not know why the market jumped so much yesterday and then retraced today. What I do know for sure though is that yesterdays move meant absolutely nothing to me because there was not at least 3 to 5 days of follow through. I also know the way that I do things, I will never get me out at the top or in at the bottom, but what I hope to do is to keep most of my gains. I’m holding onto my 4.29% gain so far this year and even though that might not be the best of the best, I’m happy with that.

Looking at the above chart there are some things that concern me more than May 23rd when I bailed out. Since May 23rd, all moving averages are now pointing down and price is firmly established below all three. Second we are approaching the starting price for 2011 and are currently just 7.8 points away from being even on the year. Lastly is that support line in yellow. That is the low of 2011 and if we go through that, the sellers will be firmly in charge and no telling where it will stop.

The next chart I want to show is the weekly chart of the S&P500 and there are a few things to note. First we have had 6 weeks in a row that have been lower than the previous. Next, the bright Yellow up trend line that has held since March 2, 2009 is under pressure and might not hold this week. The Red and Blue moving averages are getting ready to cross to the downside and that is never a good sign. Last thing to note is the advance issues verse the declining issues. They have done a total reversal and have established a down trend.

There are lot of things to be concerned about here on these charts and I hate to be a doom an gloom type person, but the charts are talking, not me. I read it and there is nothing to do but stand down and wait and see what happens. I stand by my May 23rd call to bailout and you really had many warnings from May 4th that things were starting look shaky. It’s really easy to call entry’s and exits looking back in time, but doing it day by day in real time is not for the faint of heart. Your objective, like I mentioned above, is to hold on to the majority of your gains and not trying to milk every percentage point. Eventually you will get burned. Steady as you go.

Let’s hope that the current support line holds and we all can get in near the bottom and ride the next wave up.