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Monday, 22 February 2010 00:00 |
The article discusses the question when to buy during a market pullback if one believes the larger degree trend remains higher. The problem arises from the fact that you need to find a good entry point - you can’t just buy when the market is pulling back from a recent top even if you believe the larger degree uptrend will resume, simply because this larger degree uptrend may not resume. Thus, most of the people actually buy during the early stages of a bear market (believing the pullback is just a temporary correction) and then hold on their long positions as the bear market unfolds. In this article I look at a most recent example (the pullback in the U.S. stock market from mid-January 2010 to early February 2010) to show how one should approach the market and find a good entry point. And then I discuss the question what should one actually buy – a broader market index, a sector index ETF or individual stocks.
You can view the full article here.
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