An old school analysis adds to concerns about stocks
Time Tested Strategy Warns of Risks..READ MORE
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Time Tested Strategy Warns of Risks
Because investing is such hard work, investors should consider using every tool available to them. That includes fundamental analysis based on a company's financial data, economic data provided in regular government and private sector reports and technical analysis based on the price action.
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Among the technical tools are an array of momentum indicators, moving averages and complex techniques. There is also chart analysis and a simple way to assess the direction of the trend that technical analysts have used since the 1800s.
We consider that approach in our latest article and apply the technique to charts of exchange traded funds, or ETFs, that track three major market averages. The analysis shows that the direction of the next major market trend is becoming increasingly clear.
And since the direction of the next trend could be down, we explain why investors should be worried about the conclusions developed from this technique. And, remember, this technique has withstood the test of time and been in use for at least 125 years.
The truth is that any technique could be wrong. But we are seeing more and more evidence pointing to a potential bear market. It can be expensive to ignore this evidence and we hope that you will consider the charts when making investment decisions.
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