Tech Leads The Market And Not Chasing Overextended Stocks

Happy Memorial Day to all NBT readers!

In this video I discuss the weak breadth that has occurred across the stock market since early March 2017.  Weak breadth means that less stocks are participating in a market rally, which means that it’s harder to find a stock that’s outperforming the market.  The market so far in 2017 has been led by large cap tech stocks and by the semiconductor industry groups that have been in strong Stage 2 uptrends since the middle of 2016.

In the second part of the video I go over the importance of not chasing overextended stocks that are far away from the 30-week moving average.  This can lead to losses and occurs because traders lack discipline to wait for a better buy point after the stock has consolidated for a while.

Interview With Palisade Radio On Uranium, Stage Analysis, Trend Following And Gold

At the end of last week I had a great opportunity to interview with Collin Kettell of Palisade Radio.  In the interview we discussed a wide range of topics including:

  • The Stage 2 breakout in uranium that occurred back in December 2016
  • How bull markets typically have an explosive start and finish
  • How I use Stage Analysis to identify and trade bull markets
  • The strengths and weaknesses of trend following systems
  • How the bull market in gold from 2016 started to fail at the end of the year
  • Other new bull markets besides uranium I’m looking at currently

Collin has done a lot of great interviews with other experts in the uranium space that I would highly recommend checking out at palisaderadio.com.

The Valeant Disaster And Why I Switched To Trend Following

Valeant Pharmaceuticals is a great example of why I switched my trading philosophy to trend following from an approach that more heavily used fundamental analysis. I’ve found over the years that big problems in either an individual stock or and index of stocks are hard to diagnose and determine the best course of action using pure fundamental analysis. Often you find that buying a dip in an emerging bear market can lead to disaster and big losses. Trend following using Stage Analysis provides simple rules that can be followed to avoid big downtrends whether they are in an individual stock or an index of stocks.