December
2007 | Issue #51
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Following the
overall market direction
with a stock screener
Overview
In this months newsletter we
will be looking at several useful ways to use a screener
to find out about general market performance.
To test the market should take
a trader 5 minutes a week and can give them an edge on
what strategy they should be using, whether moving to cash,
shorting or going long.
Market test #1 - number of
new 52 week highs and lows
By comparing the number of new
52 week highs and lows on a weekly basis a trader can determine
the general market direction. During bull markets highs
will outweigh lows while during a bear market lows will
outweigh highs.
The real tip is when the trend
of these numbers change. When the number of new lows forming
begins to decline/increase or when the number of new highs
forming begins to decline/increase is the more significant
event in this test. This shows a change forming in the
overall market direction.
While this test gives an indication
of the numbers of bottoms and tops forming it does not
firmly give us the overall price direction of the stocks.
For that we will require test #2.
Read
Full Article
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| Article |
Wall Street Conventional
Wisdom and Stock Market
by Steve
Selengut
During
every correction, I encourage investors to avoid
the destructive inertia that results from trying
to determine: how low can we go; how long will this
last? Investors who add to their portfolios during
downturns invariably experience higher Market Values
during the next advance. For just as surely as there
is a Santa Claus for every five year old, there is
another "value stock" rally for
every fingernail biting fifty-five year old. Value
Stocks have entered the sixth month of a broad downturn,
and nearly 50% of all Investment Grade companies are
now down more than 15% from their highs. Seventy percent
of those are down more than 20%. Working Capital Model
users should be running out of cash about now, while
they add more issues to their portfolios, and more
shares to existing holdings. Investors know that good
companies rarely close their doors, or even cut their
dividends.
Read
Full Article
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