Oh no the Dow Jones Industrial Average is down 100 points! The NASDAQ is down a full percent! Is this the reversal? The beginning of a bear market? Oh me, oh my! Wait a minute all three of the stocks I am holding are green. They are all up in a down tape. Huh?
A big sign that you are holding the right stocks or the right hedge is when the market as a whole is down, sometimes by a lot, but your holdings are still green. You are in the eye of the storm. Money may be flowing into your stock as a safe haven in a market storm. Mutual fund managers may be ‘hiding’ in the best stocks during uncertain times becasue they have to stay invested with the majority of their funds they can not go to all cash.
The entire key to stock trading is being in the names that mutual fund managers, hedge funds, portfolio managers, and retail traders want to be in. Money managers, investors and traders want to be where earnings expectations are growing. They want to buy the companies that have cash flowing into them from customers. Follow the money, the clues are continually growing earnings, increasing sales, great return on equity, institutional accumulation, innovative new products, and the stock is always with in striking distance of all time highs.
If you want to know where capital is hiding and will not come out easily look for green stocks in a red market, they are ones to watch for increasing prices.
You goal as a trader is to find where BIG capital is flowing and follow the crowd until it stops and changes course.