Chart Patterns and TA

[gfp927z]

Fwiw, I decided to start nibbling yesterday on the S+P 500. Just 1 share so far (SPY), but the idea will be to slowly average in with 1 share/day for the next 6 months.

I'm figuring the S+P should bottom somewhere in the 3600-3000 range, which would represent a 25-37% decline from the Jan peak. Right now it's down only 22%, but I figure it's best to at least get the re-entry process started, even if it's somewhat early.

One advantage of a gradual re-entry strategy is psychological. Compared to having no stocks at all, there will be less 'missing out' angst during the bounces. And if the market keeps dropping there is also less angst because you are accumulating more cheap shares. A bonus aspect with this approach is that you can always take profits during the bounces, at least that is an option.

Anyway, will see how it goes. I tried this approach a few times in the past, but as soon as the market had a decent bounce, I took the profits. But unless someone is a 'buy/hold forever' investor, there has to be some type of re-entry plan, and this gradual approach has some advantages. The automatic nature of the purchases should be a plus, and help minimize the emotional aspects.




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