Folks,

I have a quick summary from a tech article that might help you in the nasty market. I was on the road last week and got pinched a bit by not watching a couple of stocks in time. I lost a few percent more than I should have. FB and LUV

1) did your stock close below the 50 day line?
2) did your stock show any gap downs in the recent chart?
3) did your stock sell off in a large volume? This is easy to see with the big, red volume line.
4)  is the market either choppy or in a downtrend?

I'll add a 5th boggy to this list -- has your stock tried to rally early in the day and then melted down the drain?

FB did this on Friday. I was in bounce back mode and then fell apart. Several others did this last week. You get sucked in thinking that a bottom might be forming. Then it is Gomer Pyle time, "Surprise, surprise, surprise!"

If the answer is NO then you hold. If YES to 3/4 of these ( and really 3/5 of late), you sell. Period. As my friend Tim puts it, you need something to make you sell without emotion. You probably should have sold earlier, but at least this test will allow you to keep most of your investment.

Remember our example of TRN? We agreed that it needed to be sold around $45. Look where it is now!! It is around $33.50 and down another 4.6% just today. That is a 25% drop, and you would have lost all of your gains and then some. These are late stage sell rules. Even with these, you would have locked in a profit on your TRN.