My dear fellow traders/investors, I am here to offer my way to look the stock market.
I have been investing/trading since 1997. In the beginning, I experienced much frustration with both fundamental and technical analysis. One instance was even when my indicator showed a stock oversold or overbought, the stock just kept on going the "wrong" way!!! Another instance was just after I bought a stock because it was above certain moving averages, it dropped like a rock!!!??? My frustration stopped when I took the human element into consideration and learned the concept of stock demand and supply. Demand happens when the smart money (company insiders, market makers, specialists, etc.) are accumulating. Supply happens when they are distributing. Demand and supply is an old concept, but only in name, not in understanding. So I devised an indicator called Demand/Supply line to track the smart money's constant switching between buying and selling. My indicator made me realize that the smart money can accumulate at high, not just low prices, and distribute at low, not just high prices. This is the exact reason why stock can go higher and higher or lower and lower and why my old oscillators did not work. Let me show you one chart.
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This is a chart of AOS. The snakelike line is the D/S line (stock demand/supply). Please pay close attention to the yellow (darker) lines. Notice how as the price moves up, so does D/S, the cyan line. So what does this mean? It means that the smart money can also accumulate the stock at high prices. And why? You may wonder. Because they expect the stock to go even higher! This may not mean much to investors, but it packs a punch for traders because as traders, we sometimes like to sell the stock short at high prices and cover it at low prices to make profits. This chart proves why shorting a stock simply because it is high can be a dangerous proposition. Case in point, it must have been painful to short Netflix during its meteoric rise in 2011. This is what I love about this D/S line. It closely tracks movement of the smart money. It is not “stubborn,” like some technical oscillators that keep showing overbought or oversold, and try to will a stock to reverse direction. Good luck with that.
If you are interested seeing more charts with explanations, feel free to e-mail me.
I have been investing/trading since 1997. In the beginning, I experienced much frustration with both fundamental and technical analysis. One instance was even when my indicator showed a stock oversold or overbought, the stock just kept on going the "wrong" way!!! Another instance was just after I bought a stock because it was above certain moving averages, it dropped like a rock!!!??? My frustration stopped when I took the human element into consideration and learned the concept of stock demand and supply. Demand happens when the smart money (company insiders, market makers, specialists, etc.) are accumulating. Supply happens when they are distributing. Demand and supply is an old concept, but only in name, not in understanding. So I devised an indicator called Demand/Supply line to track the smart money's constant switching between buying and selling. My indicator made me realize that the smart money can accumulate at high, not just low prices, and distribute at low, not just high prices. This is the exact reason why stock can go higher and higher or lower and lower and why my old oscillators did not work. Let me show you one chart.
This is a chart of AOS. The snakelike line is the D/S line (stock demand/supply). Please pay close attention to the yellow (darker) lines. Notice how as the price moves up, so does D/S, the cyan line. So what does this mean? It means that the smart money can also accumulate the stock at high prices. And why? You may wonder. Because they expect the stock to go even higher! This may not mean much to investors, but it packs a punch for traders because as traders, we sometimes like to sell the stock short at high prices and cover it at low prices to make profits. This chart proves why shorting a stock simply because it is high can be a dangerous proposition. Case in point, it must have been painful to short Netflix during its meteoric rise in 2011. This is what I love about this D/S line. It closely tracks movement of the smart money. It is not “stubborn,” like some technical oscillators that keep showing overbought or oversold, and try to will a stock to reverse direction. Good luck with that.
If you are interested seeing more charts with explanations, feel free to e-mail me.
