There’s a tried and tested trading methodology that not only makes perfect sense but is used by some of the most respected traders in the world.
It’s called top down analysis.
You might have heard of it. This methodology starts by analyzing the market, before looking at leading and lagging sectors. Then the best candidates within the leading and lagging sectors are identified for long and short positions on the stocks or using options . Straightforward enough so far. Here’s the kicker. This method is only as good as the analysis applied at the market level and the sector level.
Why? Because 70% of a stocks price movement is attributable to the overall market and the industry sector.
Get the analysis wrong at the market or sector level and you might as well pick stocks randomly!
So how do we go about performing analysis at the market level? First we look at an artificial intelligence -based rule system. A system that examines over 400 different rules to determine a given rating for any given day on the market. These ratings are then confirmed or not by use of an additional indicator called the Phase. We’ve been using this system for over 15 years to determine where the market is going. It’ s not flawless, but it gives us an edge over the other guys. We then look at the current support and resistance levels together with other analysis tools to determine the direction the market is headed.
Once we have our market direction determined, we use a powerful set of reporting tools to analyze each sector of the market.
6 primary indicators are assessed for each sector
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MACD
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Directional Movement
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ADXR
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Positive Volume
- Volume Accumulation
- On Balance Volume
Each sector gets a rating based on these indicators. the ratings range from extreme bullish to extreme bearish.
With this rating we can determine the strongest sectors to the upside or downside.
With our market direction determined, and the strongest or weakest sectors identified, we then examine the best stocks within these sectors. By using only the S&P 500 stocks, we are assured of stocks with good liquidity. One of primary strategies is to look for specific pullbacks within these sectors for possible stock plays or option plays on the stocks. We have several other strategies we also use to determine candidate stocks.
Each week we find 2 or 3 candidate stocks that are technically poised for a move. Possible option plays are also posited.
Here’s a 30 minute recorded session from April 11, 2012. You’ll get the idea of the tremendous value in this weekly webinar.
Live Market
How can you benefit?
If you trade stocks, CFDs or spread bet, chances are this will work for you. Each week you can join us in a live webinar during US market hours. We run through out top down down analysis and stock selection technique. Honing in on potential candidates for stock and options play during live market hours!
We keep track of the previous weeks candidates and review different trading strategies on occasion during the 30 minutes sessions.
Each webinar is presented by the legendary trader Richard Muller, the former Equity Analyst at Reuters TV, and now full-time trader and educator.
PLUS Every webinar is recorded and made available to subscribers to review at their leisure.
Special offer pricing, limited time only
Regular monthly price for the Market Prism service is £199/mo.
that’s less than 1/2 price only £25 per webinar |
Please note that TheTradingPrism is an informational & educational site for motivated & self-directed individuals who are comfortable making their own independent decisions. We provide insight, strategy and knowledge of how to use available market information and analytical tools to enable clients to confidently identify and create their own trading strategies and opportunities. We do not provide investment advice or recommendations as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so.
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