Lets look at following:
- 1st dotted rectangle - Market kept going higher even though McClellan Index kept falling
- 2nd dotted rectangle - Market started chopping around and could NOT hold eventually
- 3rd dotted rectangle - The moment it dropped below MA(100) & MA(200), it could not regain its strength and continued the downtrend
- Mutual Funds - Stay invested as long market continues to remain above MA(100) but opening new positions at this juncture could be risky.
- Stocks - Invest only in strong patterns, take partial gains on open positions while having trailing STOP on remaining position. DO NOT forget to have STOP LIMIT in place.
Market continues to remain bullish for now...