A great posting Geoff ! I would like to try to add something to it.... an idea that seems to be making me money ! It's called "Beat the Market"
From the article:
"The ideal situation is to isolate stocks whose fundamentals are improving, are trading near their lows, but have been under accumulation. This means that the smart money crowd is establishing positions in anticipation of a turnaround"
My ideas:
If you're like me, a certain percentage of your assets are committed to the market. That being so, aren't we looking for a stock that will out-perform the market, rather than out-perform "cash" ? If a stock chart looks strong/weak, would we want to buy/sell it if the whole market looks stronger/weaker ?
I therefore use a relative performance chart, using XIU as a proxy for the market to which my funds are committed.Here is an example;
stockcharts.com[w,a]daclnnay[dc][pc10!d50,2!i!f][iUc20!Uf!Lb6!La12,26,9!Ll8!Lh14,3!Lyb50,2.0]&pref=G
Do you think this chart looks bullish ? (Perhaps not yet but worth watching ?). If so, then (sell XIU and) buy ATY.
Thenceforward, being long ATY, monitor the reciprocal chart
stockcharts.com[w,a]daclnnay[dc][pc10!d50,2!i!f][iUc20!Uf!Lb6!La12,26,9!Ll8!Lh14,3!Lyb50,2.0]&pref=G
Sit tight (long ATY) until this chart becomes a "buy" as it did in the first week of December. Then sell ATY and buy XIU. (I hold no brief for ATY, of course... just using the chart as an example) |
