Thursday, October 1, 2009

Buy And Sell Stocks

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As we've been discussing here, before we buy and sell stocks, we need to work with the stock market today and not against it. Your stock buys are more likely to go up in value if the market is in an uptrend. So, far, as I've been watching the stock market investing data and analyzing it according to CANSLIM principals, I am learning to understand the overall market trend and the concept of distribution days. Those are days when the market closes lower by at least .2% on volume higher than the previous day. While the S&P 500, the Dow and the NYSE all traded lower, they avoided a distribution day. The Nasdaq did not however.

Once I looked at the data, I then watched IBDTV (free to nonsubcribers) which confirmed what I had decided and also said that today's IBD would change the current outlook to "Market Uptrend Under Pressure". When you are first learning how to buy and sell stocks like we are here, this is a redflag to us that we might want to sit out until it changes back to "Market In Confirmed Uptrend".

Yesterday, I called the Investor's Business Daily to ask them what the current outlook in the Market Pulse section could say over time. I was told that there was one additional status message and that is "Market In Confirmed Downtrend". I wasn't sure that the person knew what they were talking about so over time we are going to note the possible current outlook messages. Right now we have two and I'll add those in the sidebar.

The key for us as far as how it affects us as we make our buy and sell stock decisions, this would be our signal to start exiting our stocks. I've yet to read tonight's Big Picture column and I'd expect it to say something along those lines. It will be interesting to see what the market does over the next several sessions to see if more selling by institutions takes place.

If you remember from my other lessons about buying stocks, then you will know that these big money players drive the market. This is because they buy in such huge dollar amounts that it drives up the prices of stocks. Once they start exiting stocks, it has the opposite affect. That's why we have to pay close attention to the current stock market outlook today and everyday for that matter.

Now that I am starting to get a handle on the current market outlook in today's stock market, I'm going to focus on how to buy and sell stocks online using the canslim methods.

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