Market Indicators introduces the many key indicators used by professional traders and investors every day. Having stood the test of time, these indicators will alert the trader to market situations that offer the best chance to trade profitably. Richard Sipley is a portfolio manager for Boston Private Bank and Trust Company, responsible for trading millions of dollars of assets. Sipley uses these indicators every day in his trading and investing, and he draws on that experience to explain what they are, how they work, and how to use them.
SOME PEOPLE SUGGEST that investing is a form of gambling, complaining that they can do as well playing the Pick-3 lotto or betting on roulette. Nothing could be further from the truth. In Las Vegas, the house always has the edge. In the stock market, you can have the edge, if you wait until conditions are right.
Only poker, in which individuals compete to outwit each other, really compares to investing. At its most basic, poker is about making decisions based on imperfect and incomplete information. Players each hold a few cards that only they can see. Every other player must make educated guesses about who holds what. No one knows which card will be dealt next.
An ability to read other players is the skill that sets master poker players apart. The best poker players notice that the man with the loud shirt plays conservatively; if he bets aggressively, it’s likely he has a really good hand. They see that the player in the corner plays with her chips when she’s bluffing. In poker, these are known as tells, signals that give observant competitors slightly better odds and help them win more often over the course of many games.
That’s the goal of this book. It will describe a variety of signs, or tells, that many market professionals consider. These signs don’t replace good, old-fashioned homework—but they will enhance your ability to make better stock decisions over time.
- Clues from the Options Market
- Big Money on the Move
- Fast Money on the Move
- Follow the Money: Cash, Debt, and Shorts
- Too Far, Too Fast
- Relative Value
- Sentiment Surveys
- Analyzing the Analysts
- Reporting the Financial News, Gauging the Investor’s Psyche
- Sitting and Watching
- The Insiders
- Looking to the Futures
- Giving Credit to the Bond Market
- Money In, Money Out (IPOs, Secondaries, Mergers, Buybacks, and Dividends)
- Tracking the Trailblazers