"Market Analysis from the Top Down using VPA to help Identify Market, Sector, and Group Rotation" with Ron Brown
I have been following the markets and investing and trading stocks and options since 1983. When I first began to trade and invest, I tried to learn about every technical indicator, divergences, etc., but as my education evolved, I became less enamored with technical indicators and began to concentrate on price and volume, support and resistance, trendlines and inter-market relationships. By doing this, the markets became less of a mystery to me, and actually started to make more sense.
The primary think that I have learned over the years is that the broader stock market has a tremendous effect on the performance of individual stocks, as does a stock's sector and group. There are always stocks that are trading contrary to the market, and you will generally find that they are moving in the same direction as their sectors and or groups. This is why it is imperative to use a top-down analysis software program such as HGS Investor to analyze the markets. I have used HGS Investor for 15 years.
The markets have changed dramatically since I began following them in 1983, yet the more they change, the more they remain the same. Many of Richard Wyckoff's and Jesse Livermore's stock market principles are as valid today as they were nearly 100 years ago. The primary changes, of course, are in technology, and commissions which have come down dramatically over the past 20 years and have leveled the playing field for the individual investor.
My partner, Ian Woodward, and I hold semi-annual investing workshops in Palos Verdes, California.