Page 1062 - How to Make Money in Stocks Trilogy

48 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

We’ll get into that in more detail in Chapter 5, “Selling Checklist,” but
here’s the point: When a new bull market begins, don’t stay focused on
past winners. Look for new leaders.
That’s how you capture big gains—and you can find the next crop of win-
ning stocks by regularly doing the Simple Weekend Routine, especially
when the market is still in a correction.

5. The Big Money is Made in the Early Stages of a New Uptrend
Think of a market correction like a forest fire. It ain’t pretty, but it’s a neces-
sary part of the cycle.
The forest fire burns down the old trees to make room for new growth.
And the heat of the fire pops open the seeds so new trees can take root.
Same with the market. During a correction, most of the past leaders fall
and a new crop of CAN SLIM innovators—the new growth—emerges.
But just as a new tree can’t grow while the fire is still burning, a new lead-
ing stock can’t shoot higher while the market is still in a correction.
However, as soon as that market “fire” dies down and a new uptrend
begins, the next crop of leaders take off. In fact, you’ll find that:

Winning stocks often launch their big moves right on or immediately
after a follow-through day.

This happens at the start of every strong new uptrend. Below are exam-
ples of how the top stocks took off right when follow-through days occurred
in 2003, 2010 and 2011. As you look at the charts, note how these new lead-
ers started their runs within days or just a couple of weeks after the Market
Pulse shifted from “Market in correction” to “Confirmed uptrend.”
Also keep this in mind: You’ll typically find such stocks highlighted in the
IBD 50 and/or Your Weekly Review before they launch these big moves. By
using the Simple Weekend Routine, you can have such stocks on your watch
list as they start those big price runs.