The Market is poised to Decline Aggressively: IWM, AAPL

With anxious eyes our markets are watching the ECB, they were on the edge of their seats when Bernanke spoke at Jackson Hole as well, small buyers have certainly been in the market, but unfortunately they are setting themselves up for a major fall.  During the last few days of summer, usually extending through the Holiday week, it is the smaller investors who run the show, usually quite aimlessly.  They are almost always net buyers, and they love small cap stocks; take a look at the movement in the small cap iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) to see just how pronounced this is.  PROFIT FROM THESE STOCKS TODAY!

With the little guy running the show, and the market leaders just now returning from vacation, what now looks like a market that will continue to push higher will soon look completely different.  Furthermore, the hope and prayers that rest on the shoulders of Ben Bernanke may not get what they are publically asking for.  Those words should be spoken in silence, because as we all know the world works in mysterious ways.  It is our responsibility as investors to prepare for the worst, to be ready for anything, and to not rest on hopes and prayers, and it is that mindset that everyone must adopt right now. 

Stock Traders Daily has made formal asset allocation recommendations to take advantage of the market action that lies immediately ahead, breaking down equity portfolios into 3 parts, each capable of making money regardless of where the market goes over time.  This proactive approach is exactly what will protect us, but if the market increases instead still allow us to participate.  One of the strategies used by Our President has returned 9.02% for the past 14 years (as of 12.31.11), but that was only possible because it integrated risk controls as a top priority.

It is what we do when the market declines that defines us as investors, and the Market is poised to decline.  Regardless of if Apple Inc. (NASDAQ:AAPL) issues a new iPhone, or if Obama gets elected to a second term, even if QE3 turns out to be a pipe dream (all talk and no action), our responsibilities do not change.  We need to protect ourselves, but we should not miss opportunities along the way either. 

There are proven ways to do this, and there is no better time to adopt those disciplines than right now, when the market is in a clear transition period.  The baton will soon be handed to the market leaders, and they have a much different perspective than the little guy.

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