Stan Weinstein on Bull & Bear Markets

Stan Weinstein taught that successful traders pay close attention to what the market as a whole is doing. In his book Secrets for Profiting in Bull and Bear Markets, he outlines eight indicators that longer-term traders and investors should watch. The goal is to stay on the right side of the market as often as possible.

I like Weinstein's advice for several reasons. Chief among them being that he urges traders to look at the collective message of multiple indicators -- not overly focusing on one or two. Secondly, he emphasizes waiting for price action to confirm what you anticipate. Finally, I value the fact that the indicators he selects force you to look at multiple aspects of the market including: price action, trend, market breadth, leading stocks, international markets, value, and sentiment. These are not just a bunch of oscillators and lines, but a systematic way of listening to the market's vital signs.

To be specific, the indicators are as follows:

1. Stage Analysis
2. Cumulative Advance-Decline Line
3. Market Momentum
4. New Highs vs New Lows
5. World Markets
6. A Leading Stock 
7. Price to Dividend
8. Contrary Opinion

Since I find them useful I decided to create a stand-alone page where I describe these indicators in more detail (see the "Bull or Bear?" link at the top of the blog). The page also contains live charts and links to more charts so readers can easily go through them on their own at any time.

The reason I favor my broad-based approach is because over the years I've learned that any technical tool, no matter how good its record, will throw you a curve at some point. ... but if you listen to the collective message of the majority of these fine gauges, your probability of ending up on the wrong wavelength are quite small. - Stan Weinstein

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