Despite being a big believer in fundamentals, I also believe that emotions rule the markets over the short term. While a trader needs to mostly concern themselves with charts, an investor needs to be more focused on value.
From S&P we get a few interesting tidbits – they are basically reminding us that the market is trading only 11 times earnings (cheap!!) and that 12 months later after the S&P drops as much as it just did- 77% of the time the market is higher- on average by over 18%! They also are not saying the bottom is in yet, but you don’t have to be perfect.
James Stack from InvestTech is reminding us that the Conference Board’s Leading Economic Index is hitting a high! He also reminds us that periods of high emotional trading, like right now, usually make bottoms- not tops.
I am neither Bullish nor Bearish. I just like giving myself a chance by investing in the top ranked individual GEMS stocks, especially when they also looks ripe to advance according to my charts.
When the markets look the scariest, I like to see which of the top ranked stocks held up. If I see them curl up from an oversold position, I can’t help but to take my shot. I may get stopped out too often, but I’d prefer to do that rather than watching my best ideas leave me in the dust.
*DISCLOSURE: No positions
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