As predicted in our stock market video update, SP-500 had a nice sell off yesterday. In the last few videos we provide on this site, we have been discussing the upper trendline and how it needs to sell off for us to be able to by value in some of the stocks that we are keeping an eye on.
The sell off yesterday did come and test the area which we had also been pointing out in our stock market videos but this is not a simple signal just to go out and buy. We still have to wait for some evidence that there will be buyers coming in and the bottoming price action needs to be identified before we are comfortable with placing any long positions.
Philip talks about how the Dow Jones index is outperforming the SP-500 in the sell off and this just means it did not drop as severe compared to the SP-500. This is just one of the many things you should be taking notice of when analysing the stock market.
Silver and SLW (Silver Wheaton Corp), one of the stocks we have been monitoring, came up to the prior high and fell from there which was obviously helped by the Stock Market but compared to the market SLW showed relative strength.
Another Silver stock we have on our radar is HL (Hecla Mining Co). This stock did not come up to its previous high and also fell with the market but it is still relatively strong compared to the market. This is another signal of how you can pick the right sector but picking the right stock in that sector can be another challenge all together!
If you have been following our updates, we hope by now that you understand our trading strategy. We also hope you can understand how waiting to time the stock market can keep you out of days like yesterday so you can benefit from taking the higher odds trades we often talk about.