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What do you mean I haven't hit bottom!

March 23rd, 2006 at 01:08 am

Tip of the day:

Without a doubt the best chapter ever written about equity market analysis is found in the book, How to Make Money in Stocks, 3rd edition, chapter 7, by William J. O’Neil.

It gives excellent advice and examples on how to spot tops and bottoms of the market. The highlight is his his analysis on spotting the bottoms: when an intermediate correction or an all out bear market has become evident, simply look for a market rally that is lasting longer than 3 days.

On the fourth to seventh days look for an up day of 1.7 percent or more on above average volume ( it should be at least higher volume than the previous day's). This is what happened on October 19th to start the current rally. This tool also worked to predict the bull market that started March, 2003. He claims it works about 80% of the time.

What a winning recipie for success!

More later on what to do if his advice does not work.

2 Responses to “What do you mean I haven't hit bottom!”

  1. cercis Says:

    Can I say, that it's very ironic that it's Chap 7?

  2. baselle Says:

    "about 80%". Darn. Just when I was about to bite.

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