Investors check market direction trends by learning to read economic and market signals. Those signals expose key economic and market forces that play a big role in determining market direction.
Economic trends give stock market direction. Up trends equal rising stock markets; down trends produce falling stock markets. Buy up trends sell down trends.
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.
This lesson 8 of the Monitor Markets to Protect Wealth course concludes the discussion on market direction pointers. 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.
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.
Buttons at the bottom of the page let you send this lesson to family and friends!
Subscribe free and get White Top Investor lessons in your inbox!
Make money work for you by knowing how investors think, feel and act. Learn here The Investor Mind.
White Top Investor website layout and organization: click here.
Course links to White Top Investor lessons.
Winston Churchill sees opportunity in crisis
Aggressive trading chases profit
Speculation big returns for big risks!
Investment impatience destroys wealth
Income, value and growth investing
5 Key finance checks
Email me at [email protected].
Use White Top Investor lessons to learn investing. By doing that you can grow into a knowledgeable, comfortable and confident investor. To learn how, you can learn investing one small step at a time at your own pace. Do that and become the master of your financial security and independence. White top Investor never sells or shares our email list. Learn more.
Introduction to Monitor Markets to Protect Wealth Lesson 1
4 Indicators muffle noise Lesson 2
4 Market direction drivers Lesson 3
Daily buyer-seller battles Lesson 4
3 Risk or opportunity signals Lesson 5
Look forward with data Lesson 6
5 Star market compass Lesson 7
Check market direction trends Lesson 8
Headline news market risks Lesson 9
Have a prosperous investor day!
Bryan
White Top Investor
[email protected] WhiteTopInvestor.com
Let’s connect, follow me; Twitter LinkedIn Facebook
Image courtesy FreeDigitalPhotos.net
© 2013-21 Bryan Kelly
Bryan Kelly uses White Top Investor to share his extensive investment knowledge and experience. He introduces strategies like the No-Worry Investor and the Index-Plus Layered Strategy, which encourage investor growth through personalized investment plans aligned with their unique circumstances and goals. By helping investors make money work for them and avoid common pitfalls, he aims to support the individual growth of wealth-building investors who can create secure, comfortable financial independence. With decades of experience, Bryan is committed to making stock market success accessible to anyone ready to take control of their financial future. The About page shares the story of his daughter's question that inspired the creation of White Top Investor.
Retirement Plan Essentials: How to Build Your Secure Retirement
Pyramid Portfolios: Build Wealth and Make Money Work for You
Unlocking Wealth: How Balance Sheets Empower Investors
Portfolio Optimization: The Importance of Stock Holding Size
Smart Diversification: Optimizing Investment Portfolios for Better Results
Charts Unlock Market Patterns: Finding More Money Making Opportunities
Media Exposes Financial Advisor Incompetence: How to Protect Your Wealth
Wealth Building Made Easy: Using Low Cost, High Return ETFs