Wednesday, January 4, 2012

"Were you surprised by the sudden huge move in the stock market this last week?"

MetaStock SPRS Series - Week 48 - TechniTrader® Weekly Discussion for MetaStock Users: EAT - December 26, 2011
By: Martha Stokes C.M.T.

Were you surprised by the sudden huge move in the stock market this last week?

If you had been using the right indicators and analysis of the market you would have known in advance that a big upside momentum move was about to happen.

The trick is to have a method for tracking the quiet accumulation from the institutional investor. At TechniTrader® we have developed a very easy method using 4 Market Condition Scans.

These scans pull up stocks based on various criteria that tells you which of the 8 market participant groups are dominating the trading or investing activity.

Whenever there is a surge of Institutional Investor activity, especially if this activity occurs on quiet market days, a surge of buying follows within a few days to a week.

Knowing in advance that a big move is coming allows you to enter stocks with confidence and be in the stock before it runs or gaps up with big one day gains.

In volatile or choppy markets being prepared and ready for sudden big momentum moves is critical for all short term traders.

Day traders, swing traders, and options players must be ready to trade ahead of the price action especially when the indexes and averages are reacting to news and events and are highly volatile intraday.

By having the right information at hand, and by not listening to the news which is ALWAYS lagging, a trader can anticipate when the market is about to move with momentum and which direction it will move.

Chart 1

EAT had a nice run, then a resting day but finding this stock now, is not ideal. The entry was the springboard as institutional investors moved in quietly before the big move. Traders who use TechniTrader scans were able to see the surge of quiet accumulation which doesn’t occur on the Dow 20, S&P500 or NASDAQ until after the institutions are already in the positions.

This occurs because of the way that the major market participant groups buy and sell stocks. The two major groups you need to track every day are:

1. Institutional Investors
2. Institutional Traders

When you start tracking these two huge trading activity groups, you will be able to prepare ahead of time for the big momentum runs. This means higher profits on your short term trading picks.

Trade wisely,

Martha Stokes, C.M.T.
Member of Market Technicians Association
Master Rated Technical Analyst: Decisions Unlimited, Inc.
Instructor and Developer of TechniTrader® Stock Market Courses
MetaStock Partner

©2011 Decisions Unlimited, Inc.

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