The biggest banks/institutions and hedge funds look for every edge they can get in the stock market. They have billions of Dollars to spend and hundreds of billions to make if they create the fastest computer and the most intelligent trading programs. These high frequency computers continue to advance more and more and it is making it harder for the average investor to profit.
Have you noticed how more and more the market or stocks sell off on good news or rally on bad news? Have you noticed how when you go to bed the futures are up or down but then reverse by the next morning? This is called the contrarian play and it works almost every time. These computer programs are classic emotional analysts. They take the sentiment of the market (how many average investors are buying/selling). When they have enough of the little investor in on the trade (long or short) they slam the market in the opposite direction. The small investor panics and exits the position, giving their money to the massive banks as pure profit. This happens over and over again as these computer programs rinse and repeat.
How do you avoid this fate? How do you avoid giving profits to the institutions and going broke? Simply follow the charts. Always think opposite. When the markets are at highs or surging, think about shorting. When the markets are collapsing, think about buying. Use common sense and learn technical analysis (PPT Strategies). If something is overbought, never chase, if something is oversold, never short. Use strict discipline and it will keep you from being the sucker who is filling Wall Streets pockets with gold. Stop getting bullied by Wall Street. Learn the tricks and start profiting for life.
Traders and investors are always looking for the next hot stock. It is safe to say that the sexy stocks like Apple Inc (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), or Twitter Inc (NASDAQ:TWTR) always seem to get all of the media attention. This is usually because these stocks are perceived to have the best growth opportunities, but when the overall market indexes are exceptionally volatile and choppy it is usually better to look at the less sexy or boring stocks.
One stock that is now on my radar is Procter & Gamble Company (PG). This stock has been declining sharply lower since late November 2013. The stock peaked out at $83.82 a share at that time and is now currently trading around the $77.00 level. The stock is showing very good daily chart support around the $76.00 area. This level is an area where the institutional money will generally look to support the equity, so that is a place where I begin to look for a bounce in the stock. Other stocks that look similar to PG stock are Colgate-Palmolive Co. (CL), and The Clorox Company (CLX).