About that Bond Fund you found so safe

From this week's Current Yield column in Barron's;

A rise in the benchmark 10-year note's yield to around 2.39% from just over 2% and the 30-year bond to 3.46% from 3.10% doesn't sound like much. But the resulting price rises wiped out several years' worth of the paltry income these securities generate. The popular iShares Barclays 20+ Year Treasury Bond exchange-traded fund (TLT), which tracks the long end of the market, lost 6.5% in the wake of the March FOMC meeting. That was equivalent to an 800-point-plus drop in the Dow.

You better be paying attention

Today was the day that the spx(s&p 500) reversed down. This is one indicator I follow and use as an early warning signal.
I sent out an urgent email over the weekend after the weak jobs report warning my subscribers that a reversal down in the spx looked imminent. Today I sent out an email telling them to move at least 25% of their 401k and/or IRA money into moneymarket. I moved my 401k advice accounts into moneymarket.I also moved some money in my mangaed accounts into money market.

Now this could reverse tomorrow but we have some outstanding gains over the last few years and I see no reason to be a PIG. After all its Passover!
This is a defensive measure because in my mind its all about Capital Preservation.

My main indicator is still favoring stocks but there are a bunch of minor indicators that are indicating some trouble ahead.

We'll see what happens from here. I'll be watching the spx to see if it can make a new high at 1430 which would be very positive. On the other hand it could make a lower high or a double top at 1420 and reverse down from there which would be very negative.

Bottom line is we're at a crucial point right here. This is where you need someone with their eye on the ball. This is a place where the buy and hope advisors have real problems

Did Noah wait for it to start raining before building an Ark

It's been a great run if you've been in stocks since 3/09.I use that 3/09 date because thats the date where my relative strength of stocks vs moneymarket turned to favoring stocks.

If you took that signal your up over 60% in the s& p alone.

The big question is what are you going to do now. I'm not saying that we're not going to continue up.
I don' t make those kind if predictions.
What I am saying is that you have to be prepared in case stocks start down.

I know what happens. I've been there done that.Your feeling good about yourself and your financial advisor. Your both feeling pretty smart right now. But what's your plan?To give you an example of my plan and it's MY PLAN and the plan I use for my clients. It might not be for you.I am watching the s&p chart. At current levels if it declines to 1285 it will be the first sell signal in the chart of the s&p since 12/2011.If it does hit 1285 I will move approximately 25% of my clients money out of stocks and into moneymarket. At that point I will see how it plays out. My main indicator that compares relative strength of stocks bonds and cash remains on a buy signal for stocks so until there is a change in that indicator I will stay overweighted in stocks.

It's all about capital preservation and I would be taking the 25% off to protect that capital.On the other hand for those that have been sitting in cash/moneymarket since 2008 this is a good time to start putting some of that money back in the market. At current levels you could start putting back into the s&p (an index fund preferably) like 25%. If the s& p drops below let's say 1280 you could just move it back to cash. If it continues up you at least have some invested.The point of this post is to get you to start thinking about what to do.

Sort of like Noah didn't wait until it started raining to build an ark