In the past week, I received 3 unsolicited emails from people who attended my seminars. By the way, this is not a plug for them, as I don’t plan on running one any time soon. I am writing this to make a point.
During my seminars, I constantly stress the importance of watching price action and following the leading stocks. The emails I received last week all said the same thing. The attendees were thanking me for how paying attention to price action kept them IN THE MARKET, where just 6 months ago, they would have been out of a market like this or aggressively short.
For example, last week was a VERY overhyped week in the financial media. You need to understand that it is the summer and there is very little to talk about. Therefore, the media REALLY SCARED THE S*** out of people by hyping up the Fed minutes (last Tuesday) and Bernanke’s speech (last Wednesday). Meanwhile, if you ignored the news and just focused on price action, leading stocks such as $GOOG $AMZN $PCLN $WFM $NFLX $V $CELG $TSLA were all building strong bases and moving to new highs.
The reason I follow these stocks is that: 1) they are leading growth stocks and 2) they are where the large institutions traffic. In other words, if the big boys are buying these names, it tells me they were not worried about the Fed minutes or any other news last week. In addition, there were tons of small and mid-cap names that were also acting great and moving to new highs. The sectors were so broad based that it also told ME to stay in the market. Nothing else, just price action.
Currently, the main challenge I hear from many investors is they have trouble getting in or putting money to work because the “indexes are so extended.” Once again, I default to the price action of individual stocks. Today (7/15/13), many stocks offered safe entry points and broke out of strong technical bases while the indexes were mostly flat. If you trade individual stocks, you should love markets like this because stocks can still move and help you outperform while the indexes digest their recent gains. Good luck trading!
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