By studying the methods in Mastering the Stock Market, you will gain the knowledge to approach the markets with a high degree of confidence. You’ll be able to identify opportunities and fine tune your entries and exits using technical analysis. You’ll gain the discipline to cut your losses when a trade doesn’t work and to maximize profits when everything works as planned. In short, Mastering the Stock Market will help you to make sound trades and build your wealth.
I firmly believe the second decade of the new millennium will bring another wave of prosperity and a new level of educated traders and investors. I am longer-term bullish on stocks and have had that bullish outlook since the market bottomed in March of 2009. The divergence between technology indexes such as the QQQ or the Nasdaq 100’s posting a double bottom in March 2009 versus the prior low from November 2008 was one clue, and sentiment indicators such as the CFTC COT reports, volume studies, and the longer-term Person’s Pivot support levels all helped me form that conclusion. Even into 2011, at PA Stock Alerts, we held steadfast to our bullish bias, and as we enter the 2012 presidential elections, I continue to remain on the longer-term buy side of the market.
I will continue to do so, of course, expecting the normal corrections, or shakeouts or fadeouts, but I am more optimistic on investing in the stock market now than ever. That opinion could change if the conditions and indicators I use change as well. But let me add that the reasons why I am bullish is the advancement of technology, the globalization of markets, and, of course, the need for prosperity still thrives. With those factors in play, I am not betting against the obvious that almost every generation has seen an increase in the wealth effect.
The one concern I have is that when we start to see market performance improve, the vast majority of investors will either not participate in the market because they are disbelievers, or because they don’t trust the markets due to past experience, such as the tech wreck from 2000 or the flash crash in 2010. I also have a concern that many investors have become more short term in nature, since the extreme level of volatility that existed in our marketplace from 2005 throughout late 2011 has nurtured day and swing trading from buy-and-hold investment strategies.
I am sure you can relate to the fact that time is passing—every year seems to pass more quickly than the one before. You know the saying “time flies when you are having fun.” There have been times in this life that it is not so much fun, but time still flies. Imagine buying a stock for 8.68 on the first week of March 2009, and after applying a buy-and-hold mentality, just 25 months later that stock was trading at 53.2. Not to brag, but this was a company I had shouted to everyone to get in on. I had traveled to Europe to speak at a conference in London and at the Technical Analysis Conference in Paris. I saw this company and the sales they were generating and said there is no way these guys are going to make a killing. The name of the company: Starbucks Coffee. Well, I know there are lots of success stories, such as Google, Wynn Hotels and Casinos, Apple, and the like. But here was a company whose product I actually used on a constant basis.
I believe buy-and-hold mentality for a period of time will pan out to be a stock picker’s best friend in the next few years as this business cycle develops. An area of longer-term growth and opportunities will exist in the financial arena. Wealth management, real estate, energy, communication, technology, food, health care—these are all areas that will be in constant demand and as the global population grows and becomes more educated, I stand firm on the fact that there should be a place for investment dollars in these areas. The key is choosing the right stocks, the right sectors, and the right time. I believe the chapters that follow will enlighten you to a logical approach for you to make better investment decisions.
- Stock Indexes and Sectors
- Seasonal Analysis
- Sentiment Analysis
- Comparative Relative Strength
- Breadth Studies
- Volume Analysis
- Patterns, Indicators, and Oscillators
- Scanning for Profits
- Pivot Point Analysis
- Putting It All Together