I've been tracking the overall market for three years, moving from cash into a mutual fund in my 401K at low periods and then the reverse at high. Today we hit a target level and I went to 75% cash. I sold off INTC yesterday at 77 3/4 because I feared that it would go down if the overall market goes down.
Based on past experience 1 of 3 things will happen from here:
1. The market will peak in the next few market days (or perhaps today was the peak) and then will start a downtrend. This is what happened in Feb-Apr last year.
2. The market could "wiggle" up and down for a week or so and then start a new uptrend! This is what happened last July, and why I am still 25% invested in the stock fund in my 401K.
3. The market could peak, fall back, and then return to about where it was before. That is, move horizontally for several months. This is what happened in Aug-Oct last year.
The relative odds for each, based on past history are (1) 50% (2) 25% (3) 25%. I moved to 25% stock to reflect the 25% chance of upward movement.