How do I determine the MOST TRENDING market??
3 replies to this topic
Posted 22 January 2011 - 12:04 PM
As Above. I keep hearing that the Russell trends relatively more often than other markets like S&P? How do I determine from past history which market trends more than others?
Posted 23 January 2011 - 10:15 AM
Th answer to your question is: "It depends..." 1. Different market segments (by market cap or sectors) perform better at the different stages of a trending market. 2. Early in the bull markets, the breadth expands and hence the small caps and the growth sectors should perform better. 3. In late stages of a bull market, the large caps and inflationary sectors perform better. 4. In early bear markets, the small caps perform better (to the downside), similarly the growth will be sold. 5. In late bear markets, everything pretty much just goes to Hell, but generally the majority of the market and growth sectors will start to go down less than the rest of the market, signaling an approaching bottom. 6. It is better to wait for signs of capitulation among the speculators to take a position when the above market structures start to show up near the possible turning points... If you need to really understand the relative performance, you can simply look at the relative performance of the market cap and sector indices at the different stages of the market, they are all there for you to do your homework...