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
Before we get into all the good news out there,... Read More
You remember the story about the frog that was put... Read More
Professional stock options traders use the term lean to refer... Read More
When is a dividend not a dividend?The latest thing "conservative"... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
When you invest in the stock market for ever-increasing cash... Read More
The bulls and bears of the stock market are both... Read More
Robert Rodriguez likes to buy stocks at their lows. When... Read More
During our travel down life's path we come to many... Read More
One of the great truisms of Wall Street is "Don't... Read More
Everybody is riding the Wall Street Roller coaster. Even if... Read More
Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More
Starbucks earnings are up again and so is their stock... Read More
Every broker and financial planner will tell you that you... Read More
Right now there doesn't seem to be any "gold fever".... Read More
For weeks, no, months we have been bombarded with nothing... Read More
It depends on your level of understanding of the market... Read More
When purchasing mutual funds we are cautioned to read the... Read More
As the man said, "I've got some good news and... Read More
Humpty Dumpty had a great fall and all the King's... Read More
There are formulas for just about everything, but it has... Read More
I constantly hear the talking heads on CNBC-TV, the radio... Read More
Maximizing a stock market investmentThere are several factors an investor... Read More
The ABC's of Stock Trading SuccessStock trading success...why is it... Read More
If it walks like a duck, quacks like a duck... Read More
"Buy and hold" is one of the most heralded investment... Read More
AS BUILDERS BEGIN WORK ON THE FREEDOM TOWER in New... Read More
Did you know you can make money (and a lot... Read More
Every day I hear someone on CNBC proclaim that "this... Read More
As a novice trader, you'll often feel the need to... Read More
Are you one of those many people who dread reading... Read More
I mean it when I say that. While plastic silverware... Read More
For the last few weeks we have seen the stock... Read More
There are major differences between trading stocks and trading futures.... Read More
For weeks, no, months we have been bombarded with nothing... Read More
Dollar cost averaging is one of the most popular ideas... Read More
Mutual funds were created with the idea that one person... Read More
"Buy and hold" is one of the most heralded investment... Read More
Should the market turn against you, it is important that... Read More
The following are a list of nine things you want... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
The Bollinger Band theory is designed to depict the volatility... Read More
I love roller coasters. The steeper the better. High and... Read More
One of the big advertising kicks today from mutual funds... Read More
It is finally catching up with them. The brokerage companies... Read More
People are always asking me when should I sell my... Read More
There is so much involved in developing peak performance, that... Read More
∙ Make every investment in the stock market a long-term... Read More
Trading is a fascinating activity.There are so many layers to... Read More
There are red lights, green lights, blue lights and spot... Read More
In his wonderful book, 'Multiple Streams of Income', best selling... Read More
The stock market can present you with a lot of... Read More
Two weeks ago I wrote about what the Securities and... Read More
With all the bad news that has been dumped upon... Read More
Outlined below are some of the advantages and disadvantages of... Read More
Invest in the stock market for the RIGHT reason, using... Read More
If it walks like a duck, quacks like a duck... Read More
A recent cartoon in my daily newspaper showed two guys... Read More
Every stock market investor faces one primal enemy. An enemy... Read More
Hedge current portfolio positions and gain access to capital resources... Read More
When you stand on the ocean shore and watch the... Read More
Reach in your pocket and take out that big roll... Read More
As an investor you will want to check out any... Read More
How many times has this happened to you? You're at... Read More
How do you invest? What do you really pay? At... Read More
Ever have one of those sample boxes of candy? Each... Read More
Stocks & Mutual Fund |