SPY Triggers Sell Stop @ 163.94

  

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...)