I have seen bad economic data today, and there will be another batch of data coming tomorrow, as well as AIG report, which may not be positive.
If you have some profits in past weeks, and now it's time to take some off the table. If you are still deep underwater, I don't think short term changes make much sense on you.
As I said before, if we close this week around 12450, we still have chance to see 13000, otherwise, it will be quite gloomy again.
Some people asked me about gold, I would say, gold is a safe-haven buying now. Think about early 1990s, gold is about 130 RMB per gram, now it's about 220, which is far far below inflation. During 1990s, 130 RMB is a monthly salary of an government employee in China, but now 220 is one day salary.
I predicted gold to reach at least 1050 before next correction, now there is still no panic buying, when everyone realize gold is a safe place to put money, gold will reach 1250, or even higher.
If you believe US economy is bad, and you want some hedging position in your portfolio, think about gold stocks. However, I do not recommend to put most of your account to gold as you probably will be staying underwater for a couple of years because gold stocks sometimes do not go up with future bull market.
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