Technicals

Technical analysis is the evaluation of market indicators that give us a sense of what the overall trend will be. Once the trend has been identified, we look at what sectors are strongest versus the weakest and then we look at the price and volume of each stock within the strong sector and identify the most attractive stocks to purchase.

To succeed, we cannot exclusively use just the fundamentals or just the technical method. What we do is consider both - to do otherwise is not only narrow minded as many stock analysts are, but it is foolish. Fundamental analysis deals with the company itself, while technical analysis deals with the price of that company's stock. Very often the price of the stock does not always move in the same direction at the same time as the profits of a company, so to respond to the fundamental analysis in isolation is not a wise decision.

The method that TTL uses is to look for positive company earning projections while a stock is in an Uptrend. Fundamental indicators need to be aligned with technical indicators before we can comfortably choose the stocks that will perform. When these two factors are combined with the psychology of the masses, we have all of the ingredients to create a strong case for predicting where the good buys are and to do this BEFORE the masses catch on.

The average trader (member of the masses) is driven by the human emotion that the price which he bought or sold the stock is a driving force as to how he will react to the critical decision as what to do next. He is fixated with this price, believing that the price he paid somehow impacts our future decisions, whereas in reality this factor has no bearing on the stock market.

At the TREND letter, it is our focus to be on the tail of what is moving the stock market, and be ahead of the masses.