Danger signals

A speculator of great genius once told me:
"When I see a danger signal handed to me, I don't argue with it. I get out! A few days later, if everything looks all right, I can always go back again. Thereby I have saved myself a lot of worry and money.
I figure it out this way. If I were walking along a railroad track and saw an express train coming at me sixty miles an hour, I would be damned fool not to get off the track and let the train go by. After it passed, I could always get back on track again, if I desired." I have always remembered that as a graphic bit of speculative wisdom.
Every judicious speculator is on the alert for danger signals.
Curiously, the trouble with most speculators is that something inside them keeps them from mustering enough courage to close out their commitment when they should. They hesitate and during that period of hesitation they watch the market go many points against them.
Jesse Livermore

Several things which I am looking at indicates clear danger in next few weeks. When you see danger ahead, you must act on it, is my philosophy. Protecting your profits and trading capital in first priority. So I am sitting in cash.

Besides all the techniques and tools I use, there is also a speculative instinct and speculative hunches. When you are in tune with the market sometime you can sense danger ahead of time. Those instincts are not always 100% correct, but if you don't act on them, it results in lack of conviction. I have no conviction on the long side for next couple of weeks. I may be wrong but I smell danger.