Another example of the importance of simple trend-following (and a bit of common sense).
As I posted earlier, I exited a bit prematurely 7 days ago because the market started to sell off after making a new high, so decided to lock in profits mid-day. The market subsequently sold off sharply and closed much lower that day on very heavy volume. It sold off the next 3 days on above average volume, had a post-Memorial Day bounce, then resumed the downtrend. Today it broke below its trailing 10-day low, triggering a sell signal.
Unfortunately, I was not as prescient on Japan, where I got stopped out for a small gain following the 7% sell-off in Japanese shares last week. Again, the trend is your friend: note that this was only the beginning of selling as subsequent action indicated. Always pay attention to large sell-offs on large volume. They almost always signal a change in trend if they occur after a long run-up (they may indicate a climax bottom if they occur following a protracted decline as the last seller sells, but that is another story...)
