|The Big Picture
|April 10, 2007
It was a wacky, crazy day for Trending123 folks. At least it seemed that way to me after spending time in our trading room. I’m in there all the time and one of the things I like most about hanging out with my subscribers each day, is being able to get an instant, accurate temperature on market participants and what they are feeling.
Today the overriding sentiment is screaming: I’m anxious and a little crazed. Hmm, who does that remind me of? Oh, yes, our volatile markets! I really believe that the markets are neurotic and so are we.
Since you aren’t a Trending123 subscriber (though I hope you will become one someday soon), you don’t know about my Buy Alerts. I send out A LOT of ‘em. Well, it’s funny to me because it seems that when I recommend a stock that dips, everyone is paying attention and gets right in on the stock. But when I send out an alert on a stock that moves right up, everyone gets a little freaked out and acts like they never received that email.
Meet the RST
Right now, because of this highly volatile market we are in, there are a bunch of stocks that are trading in a familiar pattern known as the RST. It stands for Reverse Symmetrical Triangle. You can learn more about it here.
Williams Percent Range
The Williams Percent Range, usually abbreviated “Williams %R,” is one of the top three indicators we use at Trending123 to identify trend reversals. It’s named after its developer, Larry Williams. Williams used a scale of 0% to 100% to show the relationship of the current closing price relative to the range of prices from the highest to the lowest over a certain period of time. As the closing price approaches the high, the Williams %R will approach 0%. And as the closing price approaches the low, the Williams %R will approach 100%.
The Williams %R gives us an easy-to-read signal for when the trend might be turning bullish or bearish. If the Williams %R rises above the 50% line, it’s bullish. If it falls below the 50% line, it’s bearish. Even better, when you use the Williams %R in conjunction with two other top Trending123 indicators—the Aroon and the PPO—you’ve got three tools that together allow you to identify what I call 1-2-3 bullish and bearish trend reversals. And as Trending123 subscribers have seen again and again, that’s where the best profits are.
And for some reason, when a stock is stuck in this pattern, people become a little edgy! It’s psychologically so mind-boggling that people seem to go a little nuts as they follow it. The pattern is jumpy, no doubt about it. And that’s why if you own EOG or HMY for example and you are following the charts, you probably hate both of these stocks. My Trending123 subscribers certainly do. But not because the stocks don’t continue to be potential money-makers for them — they definitely are still holding steady in the Trending123 portfolio.
So then why the hatred for these stocks?
Because the buying pressure in this market is causing stocks to enter this RST pattern—the pattern that makes you feel like you are trapped in a Fun House and you’re not sure what is going on! It’s intense. It’s volatile. It will make you feel like pulling your hair out because you will feel out of control.
One of my subscribers recently asked me why it seems like the market will open up in one direction and then gyrate to another and then gyrate back to the original location again? Plain and simple: it’s because everyone is reacting. And as I have mentioned before and will continue to reiterate until everyone knows it like they know their name—you must not react to the market. You want to be an ACTor not a REACTor.
Like do you notice how volume comes in when a stock goes up and volume comes in when a stock goes down? Everybody is reacting to what has already happened. And that’s why it is so easy for the market participants—the people with the most money—to fleece the people with the least amount of money. Nobody likes stocks where they should like them. They like them at current levels. They like them when everything seems rosy and picture-perfect.
You need to force your mind out of this type of thinking. You need to open up your eyes wide and see the big picture. Where is the stock headed further down the line?
People that can overcome the everyday thought process (focusing just on what is directly in front of them) and instead look around and over it…those are the people that will end up making the most money in the long run.
And of course I want YOU to be one of these people. A true participant in the market who is in control and leading the charge to their own financial destiny. And I’m here to help you make get there. You can swing by my site anytime you want.
But if you want the grand tour, you need to try my service out for real. It’s free with no strings attached for a full two weeks. And in that time you will be fully on-board, meaning you’ll get to peek behind the curtain and see and get and try everything that my current Trending123 subscribers do. Click here to give it a try.
P.S. I have tailored my Trending123 service for every kind of investor. I didn’t want to leave anyone out! Whether you are just beginning or you trade every day, you will find my service helpful and profitable! Give it a risk-free try today.