We are continually refining our stock criteria, and getting closer to actually finding winning stocks. To do that you have to have a plan, that plan is this seven step refinement process we are using. If you are not sure of where to find any of this information click the hyperlinks within each blog, or shoot me an email. I would be glad to clarify anything.
On to today's topic. Groups. Groups are a refinement of sectors. When we find the top sectors of an upward or downward trend market, that sector is comprised of several groups of stocks. VectorVest has a nice group listing of 195 groups they use and what sector they belong to. I believe you can get a no obligation 2-week trial. You can use that trial to familiarize yourself with what groups belong in what sector.
Let me give you an example of how powerful groups are. The world markets are seeing an increase in corn production for ethanol usage. Farming companies: Fertilizers, Farming Equipment, and Producers are now in higher demand then they've been in a while. It just so happens that as we funnel thru our stock selection criteria we see that the Basic Materials sector has seen extensive growth, and it is not just limited to Gold. Agriculture has many groups within the basic materials sector. Therefore it is so important to match up what groups within each sectors are leading the latest trend.
Remember Market Trend -->Indexes --> Sectors --> Groups
We will complete our series of seven steps to picking winning stocks again on Monday. I would like to leave you with a quote from my favorite market trader, Jesse Livermore. It is worth its weight in gold.
" I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting."
Friday, October 12, 2007
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment