[ Tulip U. ] Tulips Opinion ] Longs  Opinion ] Shorts Opinion ] previous opinion ] Portfolio ] Economic Analysis ]

Home
Up

Co-brand Partnerships

award-5.gif (6517 bytes)

topsite.gif (1668 bytes)

webfifty.gif (6027 bytes)


 
drop_center.gif (2753 bytes)


wpe1.jpg (2095 bytes)


FREE EMAIL
Email Login
Password
New Users Sign Up!
 
MAILING LIST
Sign up for our weekly e-mail newsletter!
Tell Me More!

Enter your e-mail address
subscribe
unsubscribe
NEWS SEARCH
WEB DIRECTORY
WEB SEARCH
 CITY GUIDES
search by:
 WEATHER

Current Weather
Enter Your City, State, or Zipcode:

   

MASTERING
THE TRADE

ORIGINAL, INTERACTIVE SEMINAR ON TRADING USING
TECHNICAL ANALYSIS
 

 
EARNINGS ESTIMATES

Enter Symbol

U.S. QUOTES

Enter Symbol:

U.S. CHARTS

Enter Symbol:

TECHNICAL OPINION

Enter Symbol:

CANADIAN CHARTS

Enter Symbol


 SEC FILINGS

Search For:
 

Company Name
Ticker Symbol

 BROKER RESEARCH
Exclusive Broker

Research
Enter Ticker

 

 

WELCOME TO TULIP U.

Contributors Wanted --If you are interested in having your articles featured in Tulip U. contact us for details at tulipu@tulipsandbears.com. Articles must be of an educational nature and deal with one of the following topics: Technical Analysis, Market Psychology, Options Trading, or General Trading Tips and Tactics.

CLASS IS NOW IN SESSION

A  series of educational trading lessons and tips designed to help you become a better trader.  The course material will range from beginner to advanced depending upon the lesson.

This Issue's Lesson:

The Value of Magazine Covers as a Contrary Indicator (5/25/98)

    Traders are continually trying to get a jump on the competition in determining the next market trend. They spend thousands of dollars on advisory services, software, and trading systems in their search for the holy grail of trend predicting. New indicators are written each day that are promised by their authors to be 100% accurate in predicting the market's next move. NEWS FLASH--there are no holy grail methods of trend prediction and there are no indicators that can be used by themselves to 100% predict the market. In short, there are no easy one step methods to tame the market madness.  However, using everything that you know about the market can help you gain an edge over traders who are blindly searching for that can't miss easy solution. One of these tools or indicators in your market knowledge toolkit that you can employ comes not from some some fast talking salesman promising riches if you use his system, but from your corner newsstand.

    The covers of national news magazines and general interest business publications can often be employed as a contrary indicator. The reason news magazines are such good contrary indicators is that magazines report on what has already occurred. Stocks are valued on expectations for the future, not on past events. Generally the  events that a magazine reports on have already been priced into the stock when the article appears. A general interest publication will try to emphasize stories that will be of the most interest to its readers. Thus if a company or stock market is doing extremely well or extremely poorly, the magazine will report on the current performance or sentiment  towards that company.  When performance or sentiment reaches extreme levels is usually when the magazines will feature cover stories on the company or market since this is what is currently important news. When a trend has been in place for a long period and most market participants have been converted to a belief in its continuance it usually means that a peak or trough is at hand. All buyers or sellers have already used  all of the resources that they are willing to use to keep the trend in place.  There  is no one left to convert to the trend's cause--sentiment in the trend's direction is at an extreme.

    Thus  when you notice several business magazines doing extremely positive or negative cover stories on a company or market it is often an indication that the trend has reached its extreme--i.e. a top or bottom. Everyone already knows about, and has participated in, the trend. Prices will often reverse at these moments of extreme sentiment. As an example, the best time to buy Latin American markets was in early 1995 when news coverage of Latin American bourses was uniformly doom and gloom. People who bought at this time of extreme negative sentiment and negative news coverage profited handsomely as this extreme of negativity  marked a bottom. 

Try to look at the media's coverage, and when you notice it is at an extremely negative or positive level, then think about using the magazine cover phenomenon as one of the indicators that helps you discern trend changes before the crowd. NEVER rely solely on just this indicator or on any other indicator as your sole method of determining buying or selling opportunities. You must have a tool chest of methods that you use as part of an overall cohesive, well planned market strategy.

DISCLAIMER

 
Search for it at the TulipSearch Open Directory
Investment Bookstore Investment Newsstand Market Mavens Report

TULIPS AND BEARS NETWORK SITES

 

FINANCE
Tulips and Bears
Contrarian Investing.com
Internet Stock Talk
Traders Message Boards
Traders Press Bookstore

NEWS AND INFORMATION
TulipsWeather
Freewarestop.com
TulipsMail
TulipsEspa´┐Żol
TulipSearch
TulipNews
TulipCards
AllMusicSearch.com
City Guides
Travel Center
Bargain Bloodhound

WEBMASTER TOOLS
TulipXchange
BecomeAnAffiliate.com
TulipDomains
GoSurfTo
TulipStats
TulipHost...coming soon
TulipTools...coming soon
TulipSubmit...coming soon




Questions or Comments? Contact Us

Copyright ´┐Ż 1998-2002 Tulips and Bears LLC.
All Rights Reserved.  Republication of this material,
including posting to message boards or news groups,
without the prior written consent of Tulips and Bears LLC
is strictly prohibited.  'Tulips and Bears' is a registered trademark of Tulips and Bears LLC


Last modified: April 03, 2001

Published By Tulips and Bears LLC