Rules for Entering the Stock Market

1) Follow the trend

• In general, if 10 week is above the 40 week, it’s in an uptrend
• Watch the 10 month SMA for the major indices. If the price is above the 10 month SMA, consider entry. Similarly consider shorting when price is below the 10 month SMA
• Watch the NYSE advance decline line (http://stockcharts.com/h-sc/ui?s=$NYAD&p=D&yr=2&mn=0&dy=0&id=p64973690597&a=173520720)
• Watch the NASDAQ New High New Low Indicator (50 moving average shoudl be 200 moving average) (http://stockcharts.com/h-sc/ui?s=$NAHL&p=D&yr=9&mn=0&dy=0&id=p90586388045&a=172263564)
• Watch the transportation Sector (10 week moving average must be over the 40 week) (http://stockcharts.com/h-sc/ui?s=$TRAN&p=W&yr=3&mn=0&dy=0&id=p59683693524&a=168085783&listNum=1)

2) Consider entry points when the markets are oversold (Look at stochastics to determine this)

3)When Purchasing Commodities, look at the trend of the $USD, Treasury Prices (TLT), $CRB and Treasury Bond Prices

• $CRB
• TLT
• TBT
• BDI

4)Consider interest rates and the yield curve. Inverted Yield curve always signals a recession. A flat or a steep curve (current) signals aggressive expansion.

5)Remember which sectors do better in different phases of the economy. ie transportation and technology lead the way.

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