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Last Thursday, we finally got the big Follow-Through Day (FTD) we’d been hoping for since this rally began on October 4th.
The NASDAQ led the market higher with a 3.3% gain on heavy volume on Thursday.
Volume was not only increased compared to the Wednesday session, but it was well above average and the highest it had been in weeks. This price-volume action left no doubt that the big institutional funds were participating in the rally. [click to continue…]
Click on chart to enlarge.
On the surface, this market appears to be in the middle of a major bull run. Key phrase: “on the surface.”
Over the past nine trading sessions, the NASDAQ has rocketed to a 16% gain off of the low it set on October 4th. It has retaken the 50-day moving average line and jumped past the previous resistance level of 2600 with no signs of trouble. The other major indices have acted similarly. The S&P 500 broke through its previous resistance level of 1220 on Friday and closed the week above that key mark. [click to continue…]
Most people have a very difficult time getting to the point.
Simply being concise is an attribute the vast majority of people lack.
The reason for this is because the more direct we are, the more responsibility we have to accept. If we make it perfectly clear what it is we’re trying to do, we either do it or we don’t. We succeed or we fail. If we’re direct about our goal, it’s much harder to talk our way out of a failure.
This is why politicians love to use qualifying adjectives. They HAVE to have some leeway on just about any goal they promise to achieve.
Let’s face it, most people love ambiguity.
But high achievers are different from most people. (Surprise, surprise.) [click to continue…]
As I write this article, the Dow is down 450 points on a Thursday afternoon. People on TV are screaming about a double-dip recession. They’re also saying that Europe’s economy is falling apart and we’re on the verge of a global meltdown.
Wait…now the Dow is down 460.
There’s one thing consuming the investment world today: panic.
It’s times like these when you absolutely MUST follow a predetermined plan.
There’s no one way to successfully invest. Warren Buffett-style value investors have proven beyond a doubt that long-term value investing works. Nicolas Darvas-style trend traders have proven that their way works too.
The key is to find the proven investment strategy that fits best with your personal psychological tendencies and lifestyle desires. [click to continue…]
Click on chart to enlarge.
Not all stock market rallies are created equal.
While analyzing the general market and determining what kind of trend we’re in is an essential component of successfully trading with the Darvas System (or any trend-following system), such analysis doesn’t tell us the WHOLE story about the health of the market.
This is because some market rallies are actually rather weak when you scratch below the surface.
For instance, 2009 gave us a notorious “junk off the bottom” market Uptrend. While the general market lurched higher thanks to several rounds of government intervention, homerun stocks were few and far between and trying to navigate through the whipsaws of the market produced significant losses for many trend traders.
How can you confirm that an Uptrend is legitimate? [click to continue…]
Life will throw many problems our way, but it also has a tendency to shower us with unexpected gifts. The market does the exact same.
The key is how we manage these ups and downs, ebbs and flows, peaks and valleys, bubbles and crashes.
How does one manage to surf life’s waves? How does a good trader mange to successfully surf the market’s waves? [click to continue…]
