When I look at cash flow, fundamentals, technicals, many …. most stocks do not look all that attractive. The news talks them up, but most on their balance and income statements…..their real income levels do not look all that great!? And yet, many of these share prices continue to rise …in the commodities and energy sectors and a few tech stocks?
Where is their momentum coming from ? Is there a momentum measuring stick or some indicators or signs of expectations that I should be looking at, or do you see the same thing…..a flat to declining market that is desparately looking for places to most safely park devaluing currencies?
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You are looking for logic and a 1-to-1 ratio of factor-to-change in the movement of stock (in the mid to short range). I believe the overwhelming body of evidence suggests that this simply does not exist.
I assume it is all noise: indeterminate physiological and emotional reactions mixed with personal business logic and individual needs.
If I have already made an investment decision, "Buy ADP below $37" to pull something out of a hat, I look at daily momentum and listen to hourly/news chatter to determine if (1) my idea is fresh (it is not), (2) whether or not my target is actionable within the next 30 days (low probability), and (3) what the technicians and computer-based trades might or might not do (S/T drive price away from target). These three items — in a split second, intuitive way — help me decide if I should act right now and if so how to execute the action ( buy, in this example, which I did not do).
Note that I am contrarian by nature and have made most of my money by going low and hard against the massive wave of the market place. For example, I bought gold during the dotcom boom and sold it all by 2006. It might take me years to formulate an idea but seconds to execute it.
Cheers.
Oscillator
Market support
Sector support
Leader in Sector
Close to or in ideal buying zone
Chart support/trending in alignment with purchase
No shortage of volume support (use as disqualifier, not qualifier)