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Strategies & Market Trends : Technical Analysis - Beginners

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To: CatLady who wrote (10599)	6/7/1999 11:19:00 PM
From: Christopher	of 12039

CatLady, < found that a raw ratio was too choppy for me to work with. > I know exactly what you mean about RS being choppy because I had the same problem myself when I first started. This is why I recommended Murphy's book because there are many examples that teaches you how to work with them. Concerning your other question about why not look for the strongest stocks I would have to say that Sector Investing is not something that you can pick during few conversations with me or during couple hours as some may beleive. There are books on the subject and it took me many months of reading and going trought charts before I got it pinned down. How long it will take you to have it down will depend on how much you know about trend line analysis. Trend line analysis are the best way to analyze RS. We can talk about this later but I will leave with the following for now. Robert Deel has written a book called "Trading The Plan". Althought he does not cover Sector Investing in details, he has only one paragraph about it. On page 119 under his paragraph "Sector Analysis and Rotation", his start with the following sentence: A large degree of the total return in your portfolio will come from being in the right sector. He adds: Portfolio managers know this and rotate their porfolios in an attempt to capture gains realized by being in the right place at the right time. His book is over 200 pages and he only has a half page on Sector Investing yet he aknowledges that most of your profit will come from being in the right Sector. Sector Investing that I use will put me in the right Sector at the right time and you do it through trend analysis. Here is what John Murphy had to say in TASC about getting in as early as possible. On page 35, he said the following: The best way to spot these again with the ratio lines or relative strength line. You can spot these turns very early, and long before they become obvious. Generaly, the first sign will be a breakout of a long-term trendline. This action can put you in as early as possible, because very often these trends don't last that long. They may only last a couple of months. As you can see, John quote trendline as the first sign to get in. You have to know trendline analysis to successfully do that. If you can't use what John has said in the above paragraph then you need to learn more about trend line analysis and his book will definitly help. That is why I recommended it in case people need help with this. Sector Investing is the most profitable way to invest today and it has been the best way for over a decade. If you think that you can learn it in couple days then think again. If it was that easy then everyone should make a lot of money. Christopher

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