On March 17th, 2003 the NASDAQ followed through and started a new Bull Market. The key to making money in the Stock Market is to pay attention to what the market is telling you. If you were not invested in the market during this time period or were too young to remember, we as a nation were in a terrible spot psychologically. We were still licking our wounds from 9/11, going to war with Iraq, and were in a Bear market for 2 ½ years and the Internet Bubble destroyed 78% of the NASDAQ value. Not many people wanted to get back in the market, why would they, they’ve been riding all these losses down with the market. The funny thing is, if you pay attention to what the market is telling you, you would ignore all the negative news and realize the bear was going to hibernate.
We just had 8 “Accumulation” days (days that close higher on higher volume than the day before) which is a sign of Big Money Institutions buying BEFORE the actual market hit bottom. On March 17th, the NASDAQ “Followed Through”. A follow through is a day after a bottom that increases 1%+ on greater volume than the day before. This particular day should feel like an explosive rally, strong buying. You will get to know what it feels like after seeing a few in my course and experiencing them in real life.
A follow through day typically occurs days 4-7, any later may work but tends to be weak and less dependable. Any sooner and not enough time has passed to prove the Follow Through valid. Read this twice: No Bull Market has EVER started without a Follow through Day! Let me say this again, No Bull Market has ever started without a Follow through Day!!!
Another confirmation of the New Bull Market was how Leading stocks were setting up. As I mentioned before, I would screen all the stocks on the NYSE, NASDAQ, and Amex each weekend and make a list of fundamentally sound Stocks that were worth following. This list was down to less than a page each week all during the Bear Market but lo and behold, my watch list started growing. The more Stocks that meet the criteria I’ll teach you, the better.
So now I have a Follow-Through day, more stocks building bases that are fundamentally sound than I had in the last two years and some New Stocks actually breaking out to new Highs. These are your new leaders. CECO was one of the stocks I remember breaking out the same day the Market followed through. Garmin, Taser, Synaptics and many others followed.
If you need more convincing to pay attention when the Market Finally turns, the New Big winners emerge during the first 10-15 weeks of a new Bull Market!
Until next time, Be the Smartest Investor in the Room.
Welcome to the Nerdery,