October 29, 2008
How can on predict when the market has topped?
Doug M asked:
One of the indicators I have noticed indicating a peak in the market is heavy volume on down days and light volume on up days. Along with the above the CBOE put call ratio drops to less than 0.75 for a couple of trading sessions. Livermoore used a list of stocks which fell before the market peaked.
One of the indicators I have noticed indicating a peak in the market is heavy volume on down days and light volume on up days. Along with the above the CBOE put call ratio drops to less than 0.75 for a couple of trading sessions. Livermoore used a list of stocks which fell before the market peaked.
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Comments on How can on predict when the market has topped? »
you never can that’s why your money is never guaranteed
If you figure it out, let me know so I can sell my stocks.
I say look at previous trends, use software if necessary. Numbers are very good indicators of trends. What do I know? I’m just a poor dumb college student.
fortune cookies or crystal.
It is essential to have system, which may or may not include volume analysis. I actually look at volume last.
Now there are as many systems as there are traders.
I for one like candlestick charts which tell you pictorially about the quality to the day’s trading. I know that certain candles show change or possible change in market direction.
I also use bollinger bands and moving averages to tell me when to get in and I use RSI and Stochastic to get out.
You might want to check out this trading blog and learn what other traders are doing.
There are more indicators. Someone asked a similar question earlier, and I gave a list of indicators that signal a market top:
How will I know that another stock marke crash is coming or quite near?
The price its going to drop when investors says it enough… sometimes the news accelerate the process, you have to Analise if the stock market is overvalued… sometimes its not just the volume since its just taking a breath until start climbing again…., you can use the MACD to get in and get out.. but a big crash its difficult to foresee…