How do you decide what stocks on the reports to put your money into? (July 21, 2001)

  This market is one where you find what sectors are working and stick with them, all the while keeping an eye out for the changing of the guard to the next leader groups. Are builders running into trouble here? Are some of the smaller techs ready to make a nice little move that could put 20% or more into our pockets? That is why we scan all sectors and find those that are shaping up the best so we can be ready to move into them.

We cover a lot of stocks. We look at the sectors and stocks that are performing well and look ready to perform. If they make the move we get into them. We have our best plays that we are focusing on, but we also keep all of the plays on watch. We then pick them off when they make their moves and our alert service is very useful in this regard. We have several accounts, but in each one we concentrate on just a handful of stocks and focus our money there. If one stops performing, we sell it and look for another stock to put the money in, either a new one or one that is working well for us when it gives us another buy point on a test of near term support or on the breakout from another basing pattern. That way our money ends up concentrated in winners that are performing the best in the market. Then we just have to watch when signs of institutional selling crop up, i.e., reversals on high volume after a strong move higher; as in the BZH example, institutions may be starting to take profits, and as we follow the institutions, we may want to do the same.

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