By Gareth Soloway on September 16th, 2010 11:53am Eastern Time
As an avid trader and Chief Market Strategist, I have learned to follow signals in the market leading to profits. Over the past few years, key stocks have emerged as a major market barometer. These stocks tell me where the market is headed with high probability. First we will talk about the financial components. Goldman Sachs Group, Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM) are two major players in the financial sector and these will generally dictate where the market will head. When both stocks are weak, one must be wary of the market if it is positive. If they are strong, the market should see a rally coming down the pipe. The same thing goes for these two major commodity players and Dow Jones Industrial Average components. Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) are amazing leading indicators for the market direction. When these four indicators are combined, they will give an extremely accurate picture of where the markets are headed.
Today, GS, JPM, XOM and CVX are all negative on the day. The markets have been fighting to get back to the positive side all day long. As long as these four stocks are negative, as leading indicators one must expect the markets to remain weak or get weaker. As of now the markets are being held in check by the light volume and options expiration. Even if the market just hovers slightly lower for the day, these stocks may signal a fall coming in the next week. Learn the tools to profit. To gain more insight, analysis, guidance, swing trades and education, join the Research Center.
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