Page 1056 - How to Make Money in Stocks Trilogy

Buying Checklist 43

S&P 500 – 2012 5 3/28/12: 5th distribution day—Market Pulse Index
changes to “Uptrend under pressure.”
Daily Chart Take defensive action.
1400

4
3/22/12:
4th distribution day 1350
6
4/4/12
6th distribution day, Market Pulse
Rising Distribution Days shifts to “Market in correction.”
Shows selling pressure is mounting. Time to lock in profits, cut losses.
Be ready to take defensive action. 1300
© 2013 Investor’s Business Daily, Inc.
Volume heavier than prior day Volume (00)
8,000,000
5,000,000
3,000,000
1,800,000
10 24 9 23 6 20 4 18
March April May
Protect your money: Take defensive action when distribution days start to mount.

We’ll see how to handle that type of weakening market in Chapter 5,
“Selling Checklist.”

Feeling a Little Overwhelmed?
I don’t blame you—it’s a lot to take in! But don’t forget: You don’t have to track
all of this on your own. Just check the Market Pulse to instantly see which way
the market is currently headed.

5 Things You Need to Know About Market Cycles

1. Your Goal is to Make Money When the Market is in an Uptrend—and
Protect Those Profits as a Downtrend Begins
I mentioned earlier how I learned this lesson the hard way. Like millions of
other investors, I made a lot of money in the bull market of the mid- to late-
1990s, but gave back much of those gains when the dot-com boom ended in
2000.