The past three months have been a frustrating time for stock market investors.  After making a major move up from August through February, and even March, the stock market seems stuck in a trading range.

Which way will it go?

The prognostications on this question are a bit maddening.  Many feel the market will make a major move on up, citing that companies are still cheap relative to their earnings.

Others say with equal conviction that the market is setting up for a significant correction.  I just read one analyst’s comment that all of his charts are lining up like he has never seen before – like some earth shaking event, driven by hidden forces, is about to happen.

Even Walmart, that bastion of capitalism and stable stocks, took a 5% tumble yesterday on news of bribes and corrupt business practices in Mexico.

Well, okay, all of these things get my attention, but they don’t seem very actionable at the moment.  I might as well do a chicken bone dance and refer to the Mayan calendar for future advice.

Like I said, rather maddening, isn’t it?

But in fact, there is something we can, and should be doing right now.

And that is to fall back on our first principles and make sure we are following them to the letter.  By that I mean check that all of your trailing stops are up to date.  You may have let this slide a bit.  That’s not so harmful when the market is on a steady climb.   But in this environment, it can be a bit dicey.

So get all of your trailing stops up to date.  And then look them over.  Single out your stocks that have exceeded your stops and sell them.  Now.

This does two things.  It keeps you from turning a small loss into a big loss in case the market decides to head south.  And it raises cash in your account which will be most useful if stock prices really go on the cheap.

Because there will be bargains out there if that happens.  And we want to be ready to scoop them up.  What’s that old phrase I hear often … oh yeah, it’s “buy low, sell high.”  So this will get you ready for the buy low part of that old familiar saw.

So that is what we can do right now.  Return to first principles and mind our trailing stops.

And I suppose it wouldn’t hurt to do a chicken bone dance now and then.

To your health and prosperity – John