Unusual Trading Signals Can Prepare You for the Next Sell-Off
Unusual trading signals in individual stocks have historically been able to forecast a market about to fall. These warnings also provide a heads-up for opportunistic entry points. On Oct. 12, we published an article saying we expected the markets should fall an average of 5.29% and that it should take an average of 13 trading days to happen.
This is very valuable for those on the sidelines waiting for a pullback in this multi-year bull market. I wrote about a threshold that had been triggered that historically precedes a big fall in the market. This provides an opportunity for patient investors because they can pick up stocks at a bargain. Because the signals are so rare, we pay close attention when they happen.
The Bottom Line
Unusual trading signals can provide opportunity. Long-term investors can unemotionally use history as a playbook for success. Pullbacks and oversold markets have been great chances to scoop up great stocks. Our long-term view is bullish on the market, and we feel that extreme pullbacks offer buying opportunities for the long run.
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