Today (June ’07) the market is a roaring bull and many are going back to the thinking of the late 90’s when they thought they were geniuses. During a bull market everyone is brilliant, but there will be another bear and it will be a mammyjammer.

Is there any method that an investor can use that will alert him to the next major down move so he can protect his capital from loss? Yes, and it is very simple.

It is the 200-day simple moving average.

If you are one of those looking for a get-rich-quick scheme you can stop reading. This is not for you. If you are a long-term investor who plans to retire with a comfortable pile of money then keep on reading. This is for you.

The great secret of the stock market which you will not hear from any broker is not buying. It is selling. There is always another bear market when the “big boys” on Wall Street have sold the little guys their stock and moved on to greener pastures. Joe Sixpack cannot play their game and should not try. He can’t win. But Joe can learn when to sell to protect his profits and sit out that next bear with his funds in a money market.

He will be watching his friends in agony as their life savings evaporate. The last bear saw losses of 40%, 50% and 70%. He will be in cash. He has learned that CASH is a position.

It is best to own either mutual funds and ETFs (Exchange Traded Funds). The risk is spread over many, many stocks by an experienced fund manager who is supposed to know how to do it. They do a good job during bull markets and have no clue how to protect clients’ money during the bear.

Here is how to know when to sell. On the Internet go to www.bigcharts.com . Type in the symbol for any mutual fund, ETF or major index and click on the red Advanced box to the right. The new screen will have a blue column on the left. Scroll down and click on Indicators. In the next screen scroll to Moving Averages, choose SMA, and in the white box type 200. Then click on Draw Chart. A red line of the 200-day will appear in the chart.

Only the red line is important. As long as it is going UP hold your position. Ignore the price of the equity. When that red line turns down SELL. Check this against any fund or ETF. It is a safe and accurate long term signal.

Never lose money in the stock market again.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know. Copyright 2006 All rights reserved.

Copyright 2007 Albert W. Thomas All rights reserved. Author of "IF IT DOESN'T GO UP, DON'T BUY IT!"