The clock is running out on the stock market's rally off the July lows. If you're sitting on stocks or funds that have given you trouble, now is the time to take your lumps and move on.

Sounds pretty dire, doesn't it? Not really. I've suggested to my subscribers for the past couple of weeks that the market will probably need to drop back to the vicinity of its July lows (1214 on the Standard & Poor's 500, closing basis) before we can get a durable recovery.

If we're lucky, the blue chip indexes won't undercut their July lows by more than a couple of percentage points. Then we can enjoy a solid fourth-quarter rebound that might well carry into the opening months of the New Year -- assuming Barack Obama continues to backpedal on his proposed tax hikes (or John McCain wins the election!).

But we mustn't run ahead of ourselves. Before a new bull market can begin, we have to get rid of the old bear. And technically, it will be almost impossible to kill the bear without at least one last stab at the lows by the major stock indexes.

By dumping some of your troubled equities now, you'll build a cash hoard to go shopping with a few weeks from now -- at lower prices. This is simply good money management: Buy the dips, sell the rallies.

What should you sell? A useful rule of thumb may be to look at the stock's July 23 and July 30 peaks. If the share price hasn't exceeded both of those peaks during August, it's a sign that buy-side interest is waning. Exit now and live to fight another day!