Why I'm Not in Panic

Do not listen to the pundits on TV today.  They all seem to be in panic.  I find the best benchmark for the market is the Value Line Index.  The Index is an arithmetic index of the 1700 largest stocks and covers over 95% of the entire US stock market capitalization.  The best long term indicator in my opinion is the 50 - 100 Day Moving Average Convergence-Divergence (MACD) Oscillator.  Back Testing has shown this to be the most reliable technical indicator as the table prepared by Barchart shows:

Value Line Index ($VLA)

2,933.58 -46.38 (-1.56%) Monday, Apr 23rd, 2012 12:44P EST

Trading Strategies / Performance

Indicator	Total Number of Trades	Average Days Per Trade	Total Profit from Trades
TrendSpotter	39 Trades	43 Days/Trade	70,701.00
7 Day Average Directional Indicator	205 Trades	10 Days/Trade	-87,140.00
10-8 Day Moving Average Hilo Channel	236 Trades	6 Days/Trade	-170,309.00
20 Day Moving Average vs Price	176 Trades	11 Days/Trade	-337,399.00
20 - 50 Day MACD Oscillator	34 Trades	57 Days/Trade	-5,942.00
20 Day Bollinger Bands	100 Trades	3 Days/Trade	-168,568.00
40 Day Commodity Channel Index	91 Trades	9 Days/Trade	-131,467.00
50 Day Moving Average vs Price	104 Trades	19 Days/Trade	15,600.00
20 - 100 Day MACD Oscillator	13 Trades	144 Days/Trade	167,723.00
50 Day Parabolic Time/Price	133 Trades	15 Days/Trade	-256,765.00
60 Day Commodity Channel Index	79 Trades	11 Days/Trade	-138,055.00
100 Day Moving Average vs Price	63 Trades	30 Days/Trade	17,759.00
50 - 100 Day MACD Oscillator	13 Trades	144 Days/Trade	179,679.00

Please look at this chart of the Value Line Index vs it's 20, 50 and 100 day moving averages plus the Barchart Trend Spotter and the 14 day high/low turtle channel:

Notice that the 100 day moving average still has steady upward momentum and the lower 14 day turtle channel hasn't really shown a break through the 2900 level.

Although short term indicators show sell signals the long term indicators are still positive.  The market is only 6.91% from its 1 year high.

Summary:  If you have stocks that have fallen 10% and you feel that the fundamentals on the stock are shaky them sell them and sit it out for awhile.  I wouldn't reinvest the cash at this time.  Now is a good time to trim deadwood and WAIT - Don't Panic!