Ian Woodward's Investing Blog

I note my readers are wondering why I have been quiet lately.  Not really, but like most I have been enjoying the Olympics and more importantly preparing the monthly High Growth Stock Newsletter, which will be out later today:

Overview:

In my recent blog I identified three items that could individually or together provide a Cataylst for this market to kick it up on a Bear Market Rally from the doldrums we suffered last month.  Sure enough the bubble bursting on the price of oil, the U.S. Dollar rising and the euphoria around the China Olympics* have all kicked into high gear this past couple of weeks and we have seen a decent, albiet choppy, rally these last couple of weeks.  What we have learned is that when Rotation from the Leaders take place in earnest, you better not be on the wrong side of the market…but then again we knew that only too well; it was only a matter of time before the old favorite Wolf-Packs took a shellacking and we look for new leadership.  It comes in two forms:

1. New Leadership with strong ERG candidates…though many experiencing failed breakouts as is ALWAYS the case in a choppy rally, leaving those who are purests of the 7-8% stop loss rule cringing at being stopped out time and time again, and

2. Dredging with beaten down Industry Groups that are always tasty morsels when they have been trashed so far down to present value for those who like to bottom fish.

My focus this month is to walk you through this most recent set of events from the high back in June through Capitulation to Reversal and Follow Through days.  As always, Ron has come up with a view in the Charting Module that gives us all we need for Capitulation and all of this will unfold at the workshop as Bango! We now have all the bases covered based on 7 years of research starting with Eureka!

Ron’s movie and focus this month is “Determining Position Sizing and Risk/Reward with the Oz Calculator”. The huge advantage of following this procedure is that:

1. You know your risk; the reward is uncertain
2. Once the trade is filled and your stop is in place, the fear is gone because you know how much exposure you have to the market

The next High Growth Stock Seminar will be from October 25 to 27, 2008, and Ron and I thank you for your full support as it is SOLD OUT two months ahead of the date.

* China Olympics…For the casual reader who may wonder what on earth the Olympics has to do with the Stock Market Rally, please look beyond the Olympics themselves which had the most spectacular opening to the games in my memory.  It demonstrated the power of China in technology, resourcefulness & discipline of mass-manpower, and overall artistic imagination.  However, an earlier point I made was “Oddly enough I feel the Olympics could be a Catalyst as China becomes front and center for the next two weeks.  You can rest assured there are background talks going on to reverse Wall Street’s downward slide that triggered a 40% sell-off in China Silverback Stocks, keep U.S. consumers buying China goods, and keep $1 trillion in U.S. dollar-based investments from free falling into an abyss, which in turn could rock the Chinese economy for years to come.”

Best Regards, Ian.

This entry was posted on Friday, August 15th, 2008 at 2:50 pm and is filed under HGS Principles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.