The Importance of Knowing The General Stock Market Direction
By: noina dodo
Submitted: 2010-06-18 02:09:40 | Word Count: 424
Knowing the general stock market direction is critically necessary to investors and traders everywhere. The underside line is that this: Most stocks (80%+) follow the overall direction of the stock market. In a very bull market cycle, most stocks can hold their own or rise. In a very correction or bear market cycle, NEARLY ALL STOCKS can fall. And stocks tend to fall a lot of faster than they rise!
It doesn't matter how sensible a stock's earnings and fundamentals are or how well the stock has been accumulated over the last several months. Build no mistake, when the market turns bearish, the correction will be brutal. It can do a lot of injury to an otherwise good portfolio.
A nice case in purpose would be Apple (AAPL: Nasdaq). Within the brutal bear market of '08-‘09, AAPL fell close to sixty% in value, although the basics never changed. I am sure you can suppose of some stocks that did the same!
In bull markets all the cream rises to the prime AND KEEPS RISING! In bear markets EVERYTHING pretty much comes down.
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Now as a full time stock market trader, I make no distinction between "long-term" bull and bear cycles or what the talking heads on TV love to call "Secular Bull" or "Secular Bear" markets. Stocks are either in uptrends or downtrends, PERIOD.
In his bestselling book "How to Create Cash in Stocks", William O'Neil teaches investors specifically how to determine the stock market's direction and the way to form selections based mostly on this direction. Additionally, O'Neil does all the analysis work for you in the Investor's Business Daily (IBD) newspaper article entitled "The Massive Picture" that appears each day on the first page. He essentially tells you!
In outline, if you want to improve your investment or trading results, know the stock market's general direction. If you're shopping for stocks in a market correction you have got a a lot of higher probability of losing money and vice versa. The only best place to seek out the final market direction within the IBD article "The Huge Picture."
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Noina has been writing articles online for nearly 2 years now. Not only does this author specialize in dating,Relationship
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