The following chart is to give an example of how I try to look at the markets. It is from one of the books by Justin Mamis. It is over layed by the ideas presented by Stan Wienstien in his book. I will look up and provide proper names later. The Mamis concept is also discussed on a website by Teresa Lo. This I will also reference later.
The reason I present this chart is to give an idea of how I cull out the picks from the scans that I do. The four phases of the market are accumulation, uptrend, distribution, and downtrend. These are labeled on the chart. Interesting that they are almost the opposite of the sentiment that is being expressed in these areas.
Basically what I look for are signals on stocks in the accumulation phase or ones at the start of the uptrend phase. As always, easy to say but often hard to identify. What may look like accumulation may be a pause in a continuing down move. Or what looks like distribution may be a pause in a continuing up move.
From these choices I then look to see if a reasonable stop can be placed. I am too tired to get into the details of this as they are cooking but not fully done. Soon, I promise.
For now the chart.
Thank you for your time.
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