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How to Identify Relative Strength When Buying Stocks

Stocks Up; Dollar Up= Bulls Are Strong!

The bulls flexed their muscles today and sent the major averages higher even as the US dollar rallied! Volume, a critical component of institutional demand, was lower than Monday’s levels which indicated a lack of buying from the institutional crowd. However, the fact that the major averages were down for most of the session and closed near their intra day highs helps offset that concern.

Adam Sarhan November 17, 2009

Stocks & Commodities Rally; Dollar Falls

Monday’s (11.16.09) after market report analyzes the important events of the day.

Adam Sarhan November 16, 2009

Stocks Fall As Dollar Rallies; S&P 500 Tracing Out A Possible Double Top?

The major averages ended lower as the US dollar surged on Thursday. Volume, a critical component of institutional demand, was higher on both major exchanges which marked the latest distribution day for the popular indexes. Decliners trumped advancers by about a 4-to-1 ratio on the NYSE and by about a 3-to-1 ratio on the Nasdaq exchange. In terms of new leadership, it was encouraging to see new 52-week highs outnumber new 52-week lows on the NYSE and Nasdaq exchange but the number of actual leaders breaking out of sound bases remains very light.

Adam Sarhan November 12, 2009

Gains On Lighter Volume Reveal Lackluster Buying Demand

The major averages rallied on Wednesday, sending the benchmark S&P 500 Index to a fresh 2009 high on positive economic and political data. However, volume, a critical component of institutional demand, was reported lower on both major exchanges. That signaled that large institutions were not aggressively buying stocks.

Adam Sarhan November 11, 2009

Lesson 2: Always Keep Your Losses Small & Never Fight The Tape!

Lesson 1 stressed the importance of developing “a sound market-tested trading plan, then trade your plan.” Lesson 2 discusses the importance of handling losses. Remember, losses are inevitable so don’t set them aside. Instead, prepare for them by integrating them into your trading plan. That way you can recognize when you are wrong, and instead of battling it out in the psychological warzone, you can cut your losses and get back to winning.

Adam Sarhan October 27, 2009

Lesson 1: Don’t Be A Wall Street Fool

Reminiscences of a Stock Operator by Edwin Lefèvre and Roger Lowenstein is one of the most powerful investment books every written. Many people believe the book outlines the story of Jesse Livermore, one of the most famous stock market operators in history. The book contains a wealth of wisdom and prescient information that has stood the test of time. Many of the concepts are applicable today! Over the next few weeks, I will break down much of that “market wisdom” into a series of easy to digest blog posts.

Adam Sarhan October 22, 2009

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