For investing in growth stock we are currently in a “wait” period.

For investing in growth stock we are currently in a “wait” period. We need to watch the Market Breadth Ratios and Market Price Action to determine a change in direction of general market conditions. These two indicators help us accurately spot a change in market direction more than 70% of the time.

The market may go up from this point without indicating a change in general market conditions. If that happens it gives us an excellent opportunity to sell stocks, in case we have not done so already.

In a bull market our game is to buy and hold until we believe that the bull market is near its end. To do this we must study general market conditions and not tips or special factors affecting individual stocks. Once we get a signal that the BULL market has ended, we get out of all our stocks.

After that we wait until we see a turn up in the market; the beginning of a reversal of general market conditions.

One of the most helpful things that we can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world. Applying this thought to our current scenario we should have started selling weak stocks when we got a sell signal from Market Breadth Ratios (on 5/3/2012) and holding on to that cash. This in effect would have gotten us more and more into cash as this market weakness proceeded instead of waiting till 5/18/2012, when we got the sell signal on Momentum Leaders Stock Index.