China Down Another 6%!? Time to Get Defensive

It’s time to get defensive, folks.

Actually, several weeks ago was the right time to get defensive. That is, before the turmoil in Greece and China reared its ugly head and punished long-only investors.

Stock markets are down sharply over the last two weeks. China’s market has fallen 30%, and even after a number of last-ditch efforts to prop up shares prices, it’s still dropping – down another 5.9% today!

Even U.S. investors are starting to freak out!

Like I said on Monday, the markets are having a full blown psychotic break as investors are trying to make sense of things. So now’s the time to play it safe.

Not only will a defensive strategy save you from excessive losses… it can hand you a profit as well!

Back at the end of April I recommended switching to a defensive stance to ride through the summer, focusing on the consumer staples and health care sectors.

Throughout May and June, these defensive sectors climbed from the bottom of Cycle 9 Alert’s Leaders & Laggards Board – which ranks the sectors I find the most and least attractive – up to the top. Overall, those sectors have held their ground while the more aggressive sectors have fallen around 3.5%.

Obviously investors are freaking out right now. But emotional investing is never wise investing.

Fortunately, my sector-based strategy in Cycle 9 Alert alerted me to the shift toward defensive sectors well in advance of the recent market carnage. And that allowed me to position Cycle 9 subscribers in two defensive plays with great profit potential.

Best

Adam O'Dell

Adam O’Dell, CMT
Chief Investment Strategist, Dent Research

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Categories: Investing

About Author

Adam O'Dell has one purpose in mind: to find and bring to subscribers investment opportunities that return the maximum profit with the minimum risk. Adam has worked as a Prop Trader for a spot Forex firm. While there, he learned the fundamentals of trading in the world’s largest market. He excelled at trading the volatile currency markets by seeking out low-risk entry points for trades with high profit potential. An MBA graduate and Affiliate Member of the Market Technicians Association, Adam is a lifelong student of the markets. He is editor of our hugely successful trading service, Cycle 9 Alert.