≈ One step at a time. ≈
When you analyze the markets, you should always start at the top. By looking at the broad indices first, like the S&P 500, Nasdaq 100 and the Dow Jones Industrial Average, you can get the birds eye view of what is happening before you concern yourself with individual stocks.
After you look at the indices, it is smart to then go into the sectors one-by-one and analyze their charts. This will help you learn the relationships between aggressive and defensive stocks, as well as find opportunities to buy and sell companies within specific sectors that are setting up.
Top Down Analysis is a step by step approach that will keep you disciplined, process oriented and organized. Build a routine that is structured from the top, to the bottom, where you finish with analyzing your individual stocks on your watchlist. That way, when you’re looking at a company, you already have the context of what the market and sectors are doing. Your decision making will become more confident and you’ll be able to make better investing and trading decisions.
Chart of the Day
XLI
During the halftime report, Coach Matt identified the opportunity in XLI. This is the Industrial sector SPDR. It’s an Exchange Traded Fund (ETF) that tracks the major industrial companies. When you find a good pattern on the sector chart, you can then look at the stocks in that sector for opportunities.
Video of the Day
Finviz Tuorial: Descriptive Tab
If you’re looking for a simple scanning tool to be able to find stocks within certain sectors, consider using FinViz. In this tutorial, Coach T explains how to filter in the descriptive tab.
Today’s Lineup
Coaches Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club Replay
If you missed last night’s episode where Coach Tyler talked about Equity Curves or would like to watch it again, check it out here.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
2 Replies to “Tackle Today: Top Down Analysis”
Good read, thank you
Thanks David!
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