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Strategies & Market Trends : Contrarian Investing

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To: pcyhuang who wrote (533)10/18/2006 10:59:01 PM
From: Return to Sender   of 4080
 
Pcyhuang, I don't think you should entirely rule out the importance of paying attention to cyclical and seasonal factors.

They do effect stocks although it's not all that predictable that just because something usually happens that it will happen again.

Here we are entering what is traditionally the strongest time of the year for stocks. Sure the DOW is making new highs but there are huge divergences present.

financialsense.com

We have not had a 10% correction in the DOW in over 4 years.

investorsinsight.com

Would it surprise you to hear that the new high today in the DOW even as the Dow Transports traded lower increases the likelihood that at least a 10% correction is coming?

It's a whole lot smarter to be a bullish contrarian nearer a bottom than a market top.

There will be a lot more stocks meeting your criteria for investment at a true major bottom too.

JMHO, RtS
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