how to make money in stocks and how to get rich_53

Another possible indicator you should be aware of in evaluating the

stage of a market cycle is the percentage stocks on daily new-high

list that could be categorized as either defensive, low-priced, laggard, or

prefered stocks. In pre-1983 cycles, some technicianstated their lack

of concern with weakness in the market because of the number of new

highs being made. Yet, a detailed analysis of the

stocks that make new-high list has shown that when a high number of preferred or defensive

stocks appear, it has frequently signaled a bear market environment.

A little surface knowledge can hurt you in the stock market.

Money market indicators miror general economic activity. I folow

selected government and Federal Reserve Board measurements, including

10 indicators of

History proves thathe direction of

the general market, as wel several industry groups, is often affected by changes in interest rates.

easy monetary policy, you may wanto be aware of measuresuch as

reserve requirements for member banks, the Ml and M2 money supply

bank reserves, ratio of government securities holdings to bank loans,

90-day Treasury Bill yields, and U.S. Treasury Bond prices.

policy decisions and their effects on the stock market, individual

stocks, and the American economy.

Changes in 90-day Treasury Bil rates and theratic tricky Fed

Funds rate sometimes help predict impending discount rate changes.

used by professionals. The Fed also watches economic data such

as unemployment figures and Gros National Product (GNP) changes.

Don't be discouraged if the subject of monetary indicators seems

complex; it is. Few economists, few presidents, virtually no one in

Congress, and even few people at the Federal Reserve, including some

heads of the Fed, understand it as well as they should.

This is just one of the many reasons why Fed should probably

remain relatively independent and not subject to political control or

extreme pressure from the Congress.