It's a time consuming process that takes about four or five hours. I try to do it every weekend. You just sit down at your PC, pull up the list, and start hitting the space bar to scroll through, stopping to study company fundamentals in charts of interest, and add them to your watch lists. Once you have looked at all those charts, you will have just viewed the entire state of the market. It's something no one else can do for you. You have to do it yourself so that your conscious and unconscious mind can absorb and synthesize the vast amount of information the market is placing at your fingertips.
There is a quote from Jesse Livermore in his book, "How to Trade in Stocks", that I always try to remember:
"Before we go any further, let me warn you that the fruits of your success [in the market] will be in direct ratio to the honesty and sincerity of your own effort in keeping your own records, doing your own thinking, and reaching your own conclusions."
If a person were to take the time to look through all those 2,800 charts this weekend, they would see that the overall market is beginning to stabilize. More than 60% of the stocks I looked at were in stage 1 bases (Cycle 1 market phase). The 200 day moving average is still trending down for most though, so it might take a few more months for this market to truly take shape, but from the action of individual stocks, things are looking more positive. Many stocks are already being rewarded for good earnings and positive outlooks and a number of stocks are hitting new highs on heavy volume (all-time and 52 week highs). Moreover, quite a few stocks have risen 50% to 100% or even more since they bottomed out some time over the last few months
I placed about 82 stocks on a watch list that I'm going to keep an eye on. That's very positive. A few months ago there were only a handful of stocks that looked interesting. Restaurant stocks are really moving if you take a look. Many retail stocks are moving as well. Education stocks are a mess, though they were leaders just a short time ago. Technology and internet is strong and there are a number of leading and promising stocks in those groups. Obama's healthcare initiatives put the kibosh on many leading medical stocks a few weeks ago. Some are beginning to recover, but it might be a dicey area for a while. MYGN is a standout so far.
To tell you the truth, the stock market really does seem to be mirroring the current environment here in Cincinnati, Ohio. The Red Bud, Pear, Dogwood, and Magnolia trees are all in bloom. Daffodils are all over the place. Forsythia and Honeysuckle are just getting their leaves. However, the grass is still dormant and the big trees like the Oaks, Walnuts, and Sycamores are in no hurry to start the new growing season.
It's a promising time of year, but it's a dangerous time as well. Winter hasn't fully given up its ascendancy and all it takes is one frost to kill off a lot of life. I have a deformed Japanese Maple that can attest to that.
But don't let the negative press fool you into thinking the stock market is dead. Things are looking a lot more positive...there's new life out there.
That doesn't mean you have to jump in right away though. The farmers are eager to get their crops in too. Nevertheless, they don't start planting until the prospects of a killing frost are greatly diminished; around here, that's later April and May.
4 comments:
ST,
I agree that things have stabilized considerably in individual stocks since the earlier chaos. One observation to note in this "V" move off the lows for the indexes, is that it is a very steep rise relative to earlier rally attempts. The steepest slopes (either direction) are typically fueled by the strongest emotion: fear. In this case the fear from short sellers and their run to cover. That is not indicative of an ultimate bottom. I'm not trying to rain on any optimism here, as I also can't wait for the next bull phase. Just trying to see it for what (I believe) it is. However I am overall optimist, and think that for the astute eye the next 3-4 months are absolutely critical, if in fact we are putting in the final touches of the bottoming process.
One things for sure, it's time for folks to stop slouching in their chairs, as this could potentially get real interesting. Could be plenty of spring sprouts right around the corner, as you put it. And when that happens, it's going to be fun!
There's a chill in the air today...a bit frosty.
That's the way it is. Spring is a transitional season - but it always ends in summer.
ST,
I see you have a watchlist of 80+ stocks.
Before you started trading full time and could watch stocks in second by second basis, did you have the experience that you were watching the stocks but not REALLY WATCHING them at the same time? and once you finished your work and came back home logging on the computer and you realized that some stocks on your watchlist broke out and already extended while under your daily watch? At that time, how did you handle this situation?
Bill said he watch no more than ten stocks. I assume he had liquidity concerns.
Ge
GE,
I was often frustrated trying to trade at work. I'd buy a stock as it moved across the pivot point - then I'd have to go to an hour long meeting. I'd come back and find that the meeting had cost me a couple thousand dollars as my stock tanked.
Watch lists are constantly narrowed down. The first watch list isthe 2800 stock in DGO. Those get narrowed down to about 80 - then down from there...often to around 10.
Post a Comment