leaders and laggers - break outs and false break outs

I remember during the April - September shake-down, I repeatedly posted about the hidden strength of the overseas indexes. Then when the shake-down finished, those indexes exploded to the upside.

It almost felt like the shake-down was trying to keep a lid on a pot of water that was about to boil, then once the lid is taken off, the pot starts to boil violently.... This type of actions by the leaders are true break outs.

Now in the recent weeks, a lot of laggers start to make an upward move, this is typical during a bull run, first the leaders go up, then the mediocre ones go up, then the garbages go up.

By looking at the charts alone, those garbages do look like break outs, from a long consolidation period.. but the real story behind it, is that the money that is late to the party, doesn't want to buy the leaders and the middle-of-the-pack (because they are already expensive), and the 'late money' start to bid up the garbage.

This is another example that making $$ in stocks takes the 10000 hour stare, because the trader then can take into consideration the price action of the instrument by itself, as well as inter-market analysis, and sector analysis that is equality important.... and it's another example where the true edge of trading lies in the traders ability to interpret such actions... because no noodle-soup 'indicators' can tell the difference between the leaders and the laggers.

所有跟帖： 

• how do you separate that from sector rotation? -越王剑- ♂ (208 bytes) () 12/13/2010 postreply 15:20:16

• Relative Strength -kirklanda100- ♂ (0 bytes) () 12/13/2010 postreply 15:24:36

• 2 points -noconfusion- ♂ (162 bytes) () 12/13/2010 postreply 16:46:50