Written by Rich B. Meier
TopEquityNews.com
There is an old market saying that has made investors millions of dollars, “The trend is your friend.”
What is the definition of a trend
It is really simple; a rising trend is a series of higher highs and higher lows. Think of it as a jagged mountain side, peaks and valleys, pointed moves up and down, but marching towards the sky (a downtrend is the backside of the mountain).
The Dow, NASDAQ and S&P have been trading in this exact pattern since the market lows of August – climbing the charts step-by-step. As long as the NASDAQ stays above 2590, the DJIA above 11,800, and the S&P higher than 1200ish, odds are stocks will continue their path upwards.
The volume picture is improving in some respects and deteriorating in some ways too. Since the start of November, up day volume has outpaced down day volume. This is a reversal of leadership that put a lot of doubts into the sustainability of the rally off of the mat.
The number of shares trading hands is a sign of commitment; like candy for kids on Halloween, the more the merrier. Before Halloween, it was the lack of volume that was scary, and now it’s falling volume that has us waiting for the boogeyman to jump out. It could be a sign that bulls are running a little low on enthusiasm, or just waiting to buy some stock on the cheap.
Overall, the best thing to do is ride the trend like a bus route. Until the indexes move below the bottom the ranges we mentioned up top, buying the dips is what the smart money will do, and you should too.
Make sure you come back to visit us in the days ahead as we will have some ideas on which busses might be moving the fastest.
Stock Market Trends: The Wheels On The Bus Go Round and Round is an article from: 
