We often talk about the dangers of listening to anyone/anything related to the markets. But we forget about the most important guide of them all -- the market itself.
In our search for the best and most valuable data, we get lost in a sea of information providers. Now, don't get me wrong -- we do need some guidance at times when the market simply is not giving us a timely message.
And there are many "market timers" out there who seem to get it right once in awhile. However, their data and warnings are not to be trusted on a regular basis.
It's very difficult, if not impossible for anyone to get it right all the time. But the market? It's the perfect indicator. It's really all you need to know for successful trading and investing.
But what is it all about and how do I approach the market analysis?
This is not brain surgery. I'm sure reading that many of you are breathing a sigh of relief. All one really needs to do is simply pay attention to price and volume action and proceed forward.
Last week we witnessed three of four equity indices close at all-time highs and right at the end of the week. Volume trends were solid, breadth improved (if only for a day) and the indicators are starting turn up. Admittedly, the indicators and the market were rather wobbly last week but the ship may have righted itself.
Meanwhile, the doomsday crowd was out in force after a break lower on Thursday. It was a poor session, but was hard to justify a trend shift without some follow-through. That didn't happen on Friday, and up we went. Those naysayers? Silence, as usual. However, if you followed their lead you might have been buying back at higher prices.
Pay close attention to the market signals and message. They won't often lead you astray.
