The previous move up to $175.75 was confirmation of a continuation of an uptrend. Further declines in IYT with a series of closes under the green moving average line would not be a healthy sign for the average stock in the stock market. Such a scenario could be a signal that the previous up move was a false move and one should begin to prepare for declining share prices. Stocks that are not going up in price are of little use for me. If such a scenario played out, I might begin to tighten stops as the market environment would not be conducive to making money. You cannot pay your rent, your mortgage, or your child's college tuition with "value" or "a good company." Last time I checked, I couldn't pay for groceries with my "fair-value estimate" of the stock certificate. You first have to convert those shares into money at the current price. If you are thinking that, "I'm a long-term investor and I don't pay attention to short-term moves in price," just know that every long-term decline started with a short-term decline. It is mathematically impossible to compound one's account when the share price is declining (unless your short). Have a discipline. Stay focused. Honestly evaluate your decision making. Make the necessary changes along the way. Improve. The value of your account is the most honest friend you have!
Cheers,
P. Franklin, Jr.
April 27th, 2017
All opinions and estimates included in this communication constitute the author’s judgment as of the date of this report and are subject to change without notice. This communication is for informational purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is subject to change at any time, based on market and other conditions. Any forward looking statements are just opinions – not a statement of fact.
Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance does not guarantee future results.