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
personalized cleaning services Des Plaines ..When it comes to stock market trading it PAYS to... Read More
Are you one of those many people who dread reading... Read More
Regardless of the fact that the world's stock markets have... Read More
You remember the story about the frog that was put... Read More
(1) Stock Market is Tough Place to Make Any Money... Read More
There is a famous cliff on the ocean in Acapulco... Read More
A few years back ? it seems like an eternity... Read More
Quick, look out the window. It's raining. No, the sun's... Read More
(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More
The thinking process of the brain relating to the... Read More
The stock market has not been very kind to your... Read More
It's about time someone spoke the truth concerning outsourcing. The... Read More
When you invest in the stock market for ever-increasing cash... Read More
Two weeks ago I wrote about what the Securities and... Read More
Let's say you are interested in this one company. You... Read More
If you were to find that you had some severe... Read More
When purchasing mutual funds we are cautioned to read the... Read More
Much like the middle child, mid-cap stocks have long struggled... Read More
What account size do I need?How much money can I... Read More
For the last 12 years we have seen the Japanese... Read More
If you have a pension plan at work you will... Read More
That sounds like good advice doesn't it? Don't lose all... Read More
We've all heard of the stock market and probably have... Read More
When it comes to buying a stock or mutual fund... Read More
Should the market turn against you, it is important that... Read More
family-safe home cleaners Arlington Heights ..Before you buy another car you walk around the lot,... Read More
For the last 12 years we have seen the Japanese... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
This is a rather simple strategy with which I am... Read More
The greatest stock market myth is the idea that investing... Read More
When most analysts, financial planners, fund specialists and investors try... Read More
We have two candidates for president that have really different... Read More
You may have wondered why your mutual funds have been... Read More
We learnt the following the hard way! If any of... Read More
Analyzing growth stocks is an important focus for any investor.... Read More
If you are serious about making and keeping money by... Read More
What does it mean to short a stock?This means that... Read More
Because there are so many stocks that are NOT paying... Read More
(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More
If you have talked to a stock broker or financial... Read More
It has fallen upon the consumer to make our economy... Read More
This is a guide to the different types of mutual... Read More
The Macedonian Stock Exchange (MSE) is not operating successfully. True,... Read More
If you have been watching the stock market at all... Read More
Ever done any whitewater rafting or canoeing? Long periods of... Read More
Have you seen all those big full page ads for... Read More
Every day on CNBC-TV they show a 200-day moving average... Read More
Regardless of the fact that the world's stock markets have... Read More
One Saturday morning, while he was sitting at his computer... Read More
In one of my previous articles (Investing in the stock... Read More
Stocks & Mutual Fund |