Admitting that the market is smarter than you means respecting trends and not fighting them. For intermediate-term speculators, or those seeking gains lasting several weeks to several months, the two best general market indicators are the price-volume behavior of the major averages and the action of the leading stocks. After the release of the earnings report, the stock bolted 7.5% to clear a head-and-shoulders continuation pattern on volume that was 277% above average.
Key Takeaways:
- But the fact of the matter is that the market does not know who you are, what Ivy League school you attended, or what a success you are in your non-investing career. None of that matters.
- I am not smart enough to know that. I am, however, just smart enough to know that the market is smarter. And that is the key.
- What I do know is that the market is quite good about discounting, or pricing in, everyone’s opinions and forecasts. And, fortunately, that is all that is needed to be on the right side of the market
“For intermediate-term speculators, or those seeking gains lasting several weeks to several months, the two best general market indicators are the price-volume behavior of the major averages and the action of the leading stocks.”
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