The chart above shows the VectorVest Composite of the UK market (VVCUK) since the Covid collapse in February 2020. The VVCUK is an equally weighed index of all the shares that VectorVest follow on the LSE and AIM which is approximately 2200 shares. It is the broadest measure of the London markets that I am aware of.
The red and green triangles on the chart show the longest measure of the trend on the VectorVest system. These are known as Confirmed Calls. At the present the red Confirmed Call is Down. Its not a time to be buying shares. Below is the advice from the home page of VectorVest which clearly instructs to stand aside.
The last two Confirmed Down signals lasted only a few trading days but the selloff after the Confirmed Down signal of Feb 2020 produced a large loss for many who ignored the signal. At this Confirmed Down signal we don’t know for sure whether its another February 2020 or akin to the last two signals that came to nothing. Neither does anyone else. There are certainly enough headwinds around in the world’s economies.
So, what to do?
- Don’t buy any more stocks until VectorVest says its safe once more to buy stocks. The advice will be clear and unambiguous.
- Watch the stops on the shares you are holding and exit the share if it closes below the VectorVest calculated stop.
- Consider raising cash in those holdings that have underperformed in the last upswing. This will be ammunition for a new series of purchases when the tide turns. The Market Timing Gauge will tell us exactly when to act.
Let’s preserve capital at all costs and hang on to those impressive post Covid gains that most of us have captured.