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When trading stocks or mutual funds selecting the right stock or fund is a
given. Buying an equity for a trade that has strong fundamentals is important.
Buying an equity that has a positive technical analysis is important. But
buying an equity in a declining or weak overall market is likely to reduce the
chance of success. Yes, these are generalities, but give me a break on this
for the moment <G>.
The point is, we would be better off trading in the general direction of the
underlying market and have the wind to our back so to speak.
The question I pose is, "What method(s), if any, do you use to determine the
probable direction of the market." For starters, one might look for
divergence's in the DJIA or SPX and the Adv-Dec line. Or applying the ADX or
Stochastic.
One that has some promise is the Parabolic SAR using the canned parameters in
MS. Take a look at the Parabolic SAR against the DJIA, the SPX, or the NASDAQ.
What's your method?
Jim Barone
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