The last support line, the 200 day moving average, was crossed on Tuesday Jan 26. After breaking through the diagonal channel line, and seeing the 14 day and 50 day MA's were already broken, I decided to sell all index positions and get back into cash. The contrary signals to stay in were a deep buy signal from the stochastics and the MACD histogram.
I will get back in if the index reaches the mid point of the bollinger band and the stochastics and MACD go back up.
Uhm... you know technical analysis is voodoo nonsense, right?
If a "system" really, truly worked, everyone would use it, at which point it would no longer work, because everyone is using it.
The only thing you can control are you expenses. Selling at the bottom and buying at the top is a recipe for financial failure.
Thanks for your response.
Buy high sell low is bad, and I agree with you. But holding on to your losers is even worse. And if I made a mistake in buying, I sell to cut my losses.
I respect technicals, price trends, and use them as trading tools to assist my value-based approach (which is in development). I think index funds is no longer going to be part of my portfolio, I would rather pick specific companies from now on.
As far as the "if it works, everybody would be doing it" argument, I used to believe it, but I no longer do. I believe few people are willing to do the hard work to make easy money.