Trend Following Stock Market Weekend Review 01102016 $QQQ $SPY $AMZN $AAPL

What a great way to start the New Year. Actually worst week EVER…yes…EVER…so what you do in the stock market? Panic? Sell Everything? Actually you need to have a complete trend following plan. Firstly in the models I use, one should not be long at this point. However most corrections in the stock market( 75% of them) are contained within a 10% sell off. If we surpass this 10% stock market sell off, bets are off and a greater correction is possible. We use many tools to keep us on the correct side of the market such as moving averages and Ned Davis & Marty Zwieg 4% rule. These both have us exiting.

This is not the time to panic. Rather build a watch list and look for strength in the strongest stocks in the strongest sectors. What is interesting is that STZ, Constellation brands hit a new high. The public storage sectors are still showing strength. The key is to have a trend following plan.
First the stock market itself…then the stocks that are showing strong profits both quarterly and annually….Look for sales to be increasing. These are signs of a stock market winner.

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