* Use the Dow – Compare the highs and lows in the Dow. If the Dow is making a new high, and your stock is near its resistance high, but not making new highs, it is a warning.
*Break Out Stocks At Risk to Buy:
-Is it breaking out after its peers within the sector?
-Is it breaking out in the late stages of an overall market rally, or as the market begins consolidation?
-Have there been down days with low volume, or a high volume reversal?
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What is causing the stock market moves is not just economic; in fact, more of it may be the trillions in money market funds, earning next to nothing, looking for the next place to go.
In other words, with any consolidation, it is likely that 10,000 will be beat, and new highs will occur, confounding many. Fresh meat to the slaughter.
People, funds, institutions must invest profitably, or at least that is the goal. Most, despite the 50% gains, have still lost money, or are just now rebuilding portfolios to a "perceived break even".
So, much of what we will see in extended upside is the buying of the investor that does not know what to do with his money. Euphoria or simple investing?
