If it walks like a duck, quacks like a duck and looks like a duck it must be a duck.
In the stock market if there are more buyers than sellers, more stocks are going up than down and the trend of the general market is higher it must be a bull.
Not a duck, not a squirrel, not a possum and especially not a bear. And everyone likes bulls better than bears in the stock market.
The mix of news that feeds this bull is indeed strange as is the economic background. Each day there is a report of "better than expected" earnings, employment, confidence, something. The general background tone is quite negative with huge looming long term deficits yet the market keeps chugging away higher and higher. I like that.
The talking heads on CNBC-TV have been jawboning a bull market all the way down from NASDAQ 5000 and now they have turned cautious. Yes, some of them are now cheerleaders for the new bull (if it is a bull and not a duck). One of them said the market is undervalued. At 33 times earnings? The mean P/E ratio (Price Earnings) since 1800 has been about 14 or 15, but "this time it is different". Really?
There may not be any logic in the market going higher, but I don't need logic when it is going up; I just get on board for a profitable ride. My regular readers know I believe in the trend and right now the trend is up. Don't ask me when the trend will end. I don't know, but I will be watching what Mr. Market is telling me and act accordingly. As long as it has four legs, horns and moos like a cow I will stay with it. When the tune changes - goodbye.
The basic question remains. How do you know when the trend changes? Don't ask your broker as he doesn't know; however, there is a very simple and accurate method that many people have used and I also use to know the general direction of the market. If you have a computer or you can use the one at the library you can go to www.bigcharts.com and type in the symbol for the S&P500 Index. It is SP500. You can then put in the value for the number of days you wish for the moving average which in this case is 200. Click and you're done. This is an excellent way to find the trend of the market. When the price of the S&P Index is above the 200-day line you are a buyer and when it falls below you sell out and put your money in cash. Very simple.
Right now there is a loud mooing sound. When you hear the growl you will want to run for cover.
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
http://www.mutualfundmagic.com; 1-888-345-7870
family-safe home cleaners Morton Grove ..The broker told me not to sell because the mutual... Read More
You may have wondered why your mutual funds have been... Read More
Someday you may want to retire and continue to live... Read More
Everyone who invests in the stock market wants to be... Read More
Peter is a professional trader, Paul is not. Peter has... Read More
04/28/2005NASDAQ dropped -12.5% year to date in 2005. S&P500 index... Read More
In 1960 an engineer working for a watch company in... Read More
If you have not back tested your trading system, you... Read More
There are many important things you need to know to... Read More
There are major differences between trading stocks and trading futures.... Read More
1. Do not spread your money too thin.My friend has... Read More
Every stock market investor faces one primal enemy. An enemy... Read More
Stock investment advice is easy to find. Do you get... Read More
Spread trading is a technique that can be used to... Read More
I am hearing predictions by brokers, financial planners, talk show... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
We have two candidates for president that have really different... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
Every year I go to the Money Show in Orlando,... Read More
Outlined below are some of the advantages and disadvantages of... Read More
Mutual funds were moderately successful in creating a presence in... Read More
Since I can remember, and that's a long time ago,... Read More
Question: How does it get better when it gets worse?Last... Read More
Starbucks earnings are up again and so is their stock... Read More
home cleaning services Wilmette ..You have decided to buy some stock or mutual funds,... Read More
Success in small cap & micro cap stock trading like... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
One of the great "secrets" of successful people is discipline... Read More
One of the main reasons many of us get into... Read More
Yesterday I received my monthly issue of MONEY magazine. This... Read More
Wall Street has been preaching the doctrine of Buy and... Read More
I mean it when I say that. While plastic silverware... Read More
Index Fund Trading can be one of the most profitable...or... Read More
I go to the Money Show every year to visit... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
It is wonderful to be alive in the information age.... Read More
Many people would like to diversify their portfolios to expand... Read More
Caught in a whirlpool and being sucked under. No life... Read More
With the stock market stubbornly refusing to settle down and... Read More
Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics,... Read More
One of the most believed bits of conventional wisdom from... Read More
I read a comment by a forum member on another... Read More
This is the continuing story of our two imaginary traders,... Read More
Picture one of those clubs where only the real heavyweights... Read More
As a novice trader, you'll often feel the need to... Read More
Let's hope you did not have any of the Enron... Read More
Every day on CNBC-TV they show a 200-day moving average... Read More
Unfortunately, most of you who are reading my column are... Read More
The recent criminal fiasco in the mutual fund industry is... Read More
Stocks & Mutual Fund |