Jim Stack of InvesTech Research shows that investors can produce hefty election-cycle gains without trying to call market tops and bottoms.
This means that tops and bottoms can be upgraded independently while character stats reside just in the upper portion (with their tiny plastic heart).
They are wrong only 20% of the time, but they are wrong at market tops and bottoms--the very area where they get hurt the most.
Over the years, I have observed consistent weekly patterns in the Relative Strength Index (RSI) that are quite useful in determining both intermediate-term tops and bottoms.
Critics have tried to dispel divergence analysis, but these examples show that when executed properly, reliable signals are generated that can help determine market tops and bottoms.
The most common patterns were double tops and bottoms two peaks (or two troughs) at similar prices to each other followed by head and shoulders and inverted head and shoulders.
Nearly two-thirds of people browsing Revel Touch apps are doing so between 5 p.m. and midnight, and half are lingering on the fancy touch features that let you match tops and bottoms with the swipe of a finger.
Double tops and double bottoms can often alert the investor to major turning points especially when they are observed in the weekly charts of a major market average or a key commodity like crude oil.
The economy usually looks good, sometimes great (think 2000 and 2007) at market tops, and terrible at market bottoms.
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Countless articles focus on the popular, but not really accurate view that the public always buys at market tops and sells at market bottoms.
Bettinger says the company stumbled with fashion last year, finding itself too far ahead of the trend toward wider tops and tighter-fitting bottoms for women, which started in Europe two years ago.
Sentiment is invariably at an extreme of bullishness near market tops and bearishness at correction bottoms, but once having reached an extreme and reversed, it becomes meaningless unless and until it either reaches the opposite extreme, or returns to the extreme just left behind.
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No one, including the investment legends of the last century, can consistently call market bottoms and tops.
Person further points out that historically, these small speculators have generally been short at market bottoms and long at market tops.
No one knows exactly where the tops are going to be, and where the bottoms are going to be, but the idea is to catch a piece in the middle.
For instance, mutual funds have a history of holding high levels of cash at market bottoms and being fully invested at market tops, and they have stepped up their buying in the last two months.
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At market bottoms you want to buy weakness to value levels, and at market tops you want to sell strength to risky levels.
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