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Daily Archives: July 21, 2008

Look for This as the Market Bounces

July 21, 2008
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Look for This as the Market Bounces

Volume is something few investors follow to any degree, yet it’s probably one of the most valuable technical tools you can use to find big-winning stocks.  Simply put, when volume (i.e., shares traded per day) spikes while the stock makes a humongous upmove (or downmove), especially near the start of a move, you should take note. Look at Walter Industries (WLT), above, a leading coal stock of 2008.  While most investors just heard of the coal growth story within the past few weeks, the market was telling you something big was happening way back in January.  Following WLT’s sharp dip...

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Bubbles Spell Trouble

July 21, 2008
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Bubbles occur when crowds of people (including investors) behave irrationally.  It has spelled trouble throughout time. The first recorded financial bubble occurred in 1636 when tulip mania hit the Netherlands.  Tulips became a luxury item and status symbol because of their vivid mosaic coloring.  Demand increased rapidly, pushing prices up to foolish heights.  Futures contracts were developed to enable buyers to buy next year’s crop.  Tulips began trading on exchanges. Speculators–not growers–bought bulbs and tulips expecting to resell them at higher prices.  At the top, one tulip bulb could fetch the equivalent of 20 years of wages for a...

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