Even in a bear market some stocks rise
If you think the market might turn bearish you could have a look at those stocks whose Earnings Per Share are rising faster than the share price (I'm still working on a scan for this)
If that stock is also showing good TA the two sets of facts ought to confirm each other as a buy
Then again doesn't Weinstein say never to trade against the market trend?
Index trading is for those who dont want to be exposed to individual stock risks and rewards
I am sure you know more about how to recognise Index turning points than I do and I would think that sentiment has to outrun fundamentals strongly ... in the form of panic buying prior to a major Index down turn
However, there may well be examples in history where this condition was not met
As a trend follower I would suggest you do not confuse yourself with fundamentals unless you think a group of fundamentals is about to outweigh sentiment and even then sentiment can run counter to fundamentals for weeks or months before the truth kicks in
So while I believe fundamentals ultimately matter most, so does sentiment which can for periods be way out of kilter with fundamentals (eg the dot com boom)
Sentiment can also generate deterioration in fundamentals when fear grips the human mind
As President Roosevelt said "We have nothing to fear but fear itself" but fear can be devastating once mass psychology is gripped by it, just as mass optimism can outweigh fundamentals
Fundamental analysis wanted
I realise a "charting website & forum" is going to be heavily focused on TA.
However, I also know many on the Forum seem to use a bit of FA to add to their overall view of the market.
It seems to me, that we have recently been bombarded with significant news that should alter the fundamentals of many companies, so ...
How are Fundamental Analysts treating the news.
1. XJO is nearing a record high; and US is doing the same.
2. RBA is worried about inflation and is tightening monetary policy
3. Personal debt levels in Australia are at an all time high caused by people being over-extended on home mortgages and credit card debt.
4. The WBC Consumer Sentiment Index, which was just released at 1030 a.m., states:
Consumer Sentiment is at the 2nd lowest level since the 2001 Recession"
So, how should fundamental analysts treat these pieces of information when assessing their market strategy?
Regards
Dean
PS: I should also add that Labour Cost Index figures (Q3) and House Prices (Q3) are also being released today at 1130 a.m.
Intuitively, you would expect the LCI to have risen since employment is at record levels, which should add to the rising inflation.
Thanks for taking the time to reply.
You know me - I never know which way the market is going other than for the 30-60 minutes that I have an open position (and even then I have no idea sometimes!!).
I've just been intrigued to observe the continuing upward move on the XJO in recent times, since as a novice Fundamentalist, I would have thought recent economic indicators are turning a tad bearish?