34 Percent Cash

These are troubled times for the stock market even though the Dow was up over 100 points today.  Apple is still down $5 from last week's high after losing most of it on Monday.  AAPL is now $114 per share.  I was one of the people who got cut in Apple's downfall because I was expecting the stock to get over the $120 mark by mid-December.  That was when I had planned to sell.  Instead, I got shaken out on Monday.  I lost most of my profit, but I still had a positive gain
when I sold for $115.73 to be safe.

After selling Apple and a few other stocks, I am now 34% cash.  That is money that the market cannot take away from me, and I will use the cash on big sell-offs to buy quality stocks or ETFs.  I don't believe we are headed for a bear market, but I believe we will experience a lot of volatility over the next few months.  Since the economy is actually doing well, that is why I believe the market will always come back some, and I can make money riding up from the bottom of each downturn. 

As for predicting the extent of each downturn, I cannot possibly know the numbers at the bottom, but I can get close.  I believe we will have several 5-10% declines over the next six months.  $NYMO will most likely be below -55 in all of those cases.  That is when I plan to buy.  UDOW, the Dow 3x ETF, is one of the stocks I plan to buy at each bottom.  So, a lot of the money I make in the next six months will be from buying at the bottom and attempting to sell at the top.