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 In Step #3 of the Tutorial, we
discuss calculation and assembly of Stock Configurations. Stock Configurations
are combinations of moving averages which help us articulate whether it is time
to Buy, Sell, Short, or Cover an individual stock by illustrating where the
stock is going in relation to where it has been (i.e., direction).
Each week, after we have determined the Market Stage and assembled
the Stock Configurations for each stock in our Universe, we look for Buy Configurations among the
stocks in our Universe. We do this by
comparing each stock's configuration against the Buy Configurations shown in the
table for the appropriate Market Stage. If a stock in our Universe has
a matching Buy Configuration, we evaluate that stock for purchase.
Please notice we do not Buy except during Market Stages 2 and 3.
| Market Stage 1
- Uncertain, but probably just a Bear Market rally |
DO NOT
BUY
DURING A
BEAR MARKET |
| Market Stage 2
- Uncertain, but possibly the 1st sign of a new Bull Market* |
5wk - UP
40wk - DOWN
15wk - UP |
* Note: Buying during a Market Stage 2 is
more risky than buying during a Market Stage 3.
| Market Stage 3
- Bullish: We are experiencing Bull Market conditions |
|
5wk - UP
40wk - DOWN
15wk - UP
|
or |
5wk
- UP or DOWN
15wk - UP
Price of the stock
- UP or DOWN
40wk - DOWN |
| Market Stage 4
- Uncertain, but possibly the 1st sign of a new Bear Market |
DO NOT
BUY
DURING THE POSSIBILITY OF A
NEW BEAR MARKET |
| Market Stage 5
- Bearish: We are experiencing Bear Market conditions |
DO NOT
BUY
DURING A
BEAR MARKET |
|
