For weeks, no, months we have been bombarded with nothing but negative news about the economy in general and thousands of individual companies. The stock market has dropped thousands of points and more than $8 trillion in paper assets have disappeared.
Note I said paper assets because until you turn it into spendable money these numbers are but a figure on a piece of paper. Sure that doesn't make you feel any better when you bought Lucent at $80 and have seen it go to 80 cents. You could have protected you profits or reduced your loss if you have placed an open stop-loss order with your broker. Brokers hate this, but YOU must protect you capital because he is not going to.
This past 2 weeks the bad news has continued to be shoveled out by the news media, but instead of making the market go down it has rallied about 1,000 points. Having been a floor trader for many years my experience with this kind of reaction tells me what is going on. The market is ignoring the bad stuff and has decided to go UP. Hooray! The traders are grasping at anything that looks bullish and not paying any attention to the negatives.
The market had become so oversold that almost anything will cause it to advance. Now you want to know if this is "the Bottom". No one can know for sure because the long -term trend remains down and is still in place. The voice of the market is now clearly saying, "I don't want to go down for a while". It might even allow the stock prices to continue to rise. How far and for how long - don't ask. No one knows. The stock market remains an enigma wrapped in a mystery. A few very astute (or lucky) folks are able to understand market language and make profits whether it goes up or down. Mr. Average Broker (also Mr. Average Financial Planner) has no idea what the market is saying. They have not taken the time to learn their trade.
Many times what is actually bad news makes the market go up. Here is one example. The weekly unemployment figure comes out to show there were 30,000 fewer jobs. That isn't good news. The DOW jumps up 100 points. Huh? The Wall Street mavens were predicting job losses of 55,000 so this number is a blessing. See what I mean? It is not the actual news, but the difference in what was expected and what actually occurred. You can apply this to almost every statistic put out by important government and private agencies.
The same applies to good news that does not move the market up. What you think you see is not always what you get. Before you grasp any figure as either bullish or bearish find out what number was expected and wait for the reaction to it.
Bad news can be good news and visa versa.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
Alto Pass chicago limos ..If you are going to be a winner in the... Read More
Everyone who follows the financial news has heard of mutual... Read More
The Shadow knows. There used to be a radio program... Read More
If you have talked to a stock broker or financial... Read More
As one of my regular readers you know I have... Read More
Has your broker been calling you recently with the "great... Read More
Day trading is all about making buy and sell decisions.... Read More
With all the bad news that has been dumped upon... Read More
You have heard about a particular mutual fund from a... Read More
There can't be many traders who haven't at least considered... Read More
If it walks like a duck, quacks like a duck... Read More
I cringe every time I hear a novice investor tell... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
Have you seen all those big full page ads for... Read More
Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics,... Read More
If there is one term over-used when talking about making... Read More
How many times has this happened to you? You're at... Read More
What a great statement!I just heard someone use it in... Read More
It is finally catching up with them. The brokerage companies... Read More
Have you been listening to the talking heads on CNBC-TV?... Read More
There are many important things you need to know to... Read More
Four blind men were asked to give a description of... Read More
Mutual funds were moderately successful in creating a presence in... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
Alto Pass cool limo ..Never lose money in the stock market again. Yeah, I... Read More
The debate rages all over Eastern and Central Europe, in... Read More
I read a comment by a forum member on another... Read More
If you haven't heard of the technical indicator with the... Read More
Several times each month I am solicited by various market... Read More
I would like to share with the reader an article... Read More
Suppose your position has made a big move and you... Read More
Stock trading can be a very profitable activity. You can... Read More
Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More
Are you attracted to the idea of being in control... Read More
Question: How does it get better when it gets worse?Last... Read More
At some time in your life you have been on... Read More
Money: the most charged word in the planet. It means... Read More
When we go to the circus we see a trapeze... Read More
Let's hope you did not have any of the Enron... Read More
Every successful trader has a winning system. There are of... Read More
Everybody is riding the Wall Street Roller coaster. Even if... Read More
As an investor you will want to check out any... Read More
Wouldn't it be nice if you were only in the... Read More
If you are serious about making and keeping money by... Read More
One Saturday morning, while he was sitting at his computer... Read More
Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics,... Read More
The Winter Games for the Olympics are coming up soon... Read More
This is the continuing story of our two imaginary traders,... Read More
We are already in it, but you can't see it.... Read More
Stocks & Mutual Fund |