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Know the trend for stock market direction

Part 4 of 4: White Top View, Market Direction series

Concluding stock market direction pointers

Last time our discussion continued to 5 Stock Market Direction Pointers as Part 3 of the White Top View Market Direction series in our last post. This post concludes the discussion on market direction pointers.

Digging deeper into economic data can refine the results but there is little practical reason to do so. The basic approach works well. Trending up produces a rising stock market; tending down produces a falling stock market.

When the trend is up, confidently take stock positions. Go long by buying shares. Purchase stocks that benefit most from economic growth.

If the trend is down, get out of the market by selling stock positions and going to cash. Alternately in a down market, sell short to profit from falling stock prices.

Even when all looks good, remain on watch. Be alert to observe any early warning signs of a slowdown or a change in trend.

In my experience this simple method of predicting the stock market direction has proven be be very reliable for a very long time.

The earlier posts in the, White Top View, Market Direction series are available by clicking the links:

Part 1, 3 Stock Market Guidelines Replace Endless Reports

Part 2, Investors Use Data to Look Forward

Part 3, 5 Stock Market Direction Pointers

We spend when we can

Our normal spending behavior only changes for a reason. So does that of our family, friends and neighbors. That is what makes this such a reliable approach. We only buy when confident. We hoard cash when there are financial concerns.

When we have concerns about the future of our business, job or finances, we slow or stop spending. A car gets replaced when we feel secure. We certainly don’t start a renovation or consider buying a larger house unless we think we can afford it.

Our behavior and that of our family, friends and neighbors cascades through the community and economy. Keeping aware of any changes in such behavior puts us in great position to move as required when the stock market changes.

Your economic research will give you a good understanding of the economic outlook. You will be amazed how such basic research gets missed by many who should know. That includes far too many political and business leaders.

At your next BBQ or cocktail party you can speak with authority about “your” research. If you get up on a soapbox and hold forth, do let me know how that goes!

What is your economic outlook? What do you think will come next? Questions and comments welcome here.

Pay it forward, please share this blog. Your comments and questions are welcome here. The bite sized White Top Investor lessons are intended to demystify investing. You can become a knowledgeable confident investor, one small step at a time. Please ask questions, I can help you better understand markets and investing. The White Top Views email list will not be shared or sold.

Have a prosperous day!
Bryan
White Top Investor
See all blog posts at: www.WhiteTopInvestor.com
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These discussions and information are intended to help you better understand markets and investing. The White Top Views email list will not be shared or sold. I am not a financial or investment advisor; opinions are for informational and educational purposes only and are not intended as investment advice. Site or blog content can be syndicated, please contact info@WhiteTopInvestor.com.

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Links to, White Top View, Market Direction series:

Part 1, 3 Stock Market Guidelines Replace Endless Reports

Part 2, Investors Use Data to Look Forward

Part 3, 5 Stock Market Direction Pointers

Part 4, Know the Trend for Stock Market Direction

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