When I provide my daily trading plan tomorrow, I will be 100% in cash - something that doesn't happen all that often. At the close on Friday, I proceeded to close out all eight existing positions in my portfolio. But let me be clear, I'm not some dooms-and-gloom guy calling for a market crash on Tuesday or any day in the near future. Instead, I simply concluded that the risk at this stage of the rally was much greater than any reward that could be had. As a result, on that conclusion that came from a multitude of reasons, I proceeded to close out one position after another.
What I believe we could see this upcoming week is some selling, perhaps similar to what we saw that followed the rally back on 1/5 of this month, with a worst case scenario of what we saw on 11/8 and thereafter for two weeks.
So here are my reasons for selling.
With this theory in place, there was three possible outcomes:
Two out of three of the scenarios were acceptable and the one that was no acceptable was the one that included me staying long. But once again, I'm not looking for some major sell-off or market crash - if it happens, then fine, but I am simply looking for the market to pullback some in the short-term, and then should the market cooperate, I'll jump back into my long positions. But for now, a breather seems to be in the cards.