In the current economic climate, the stock market can be a tricky thing to navigate. It’s a risky, high-stakes endeavor that comes with no guarantees – so understanding just what’s going on under the surface is key. Luckily, certain tools can help us get a better idea of what’s taking shape.
One of the best tools for analyzing the stock market is market breadth. The concept is simple – just a measure of how many stocks are moving in the same direction as the overall market. A strong market, for instance, features a high percentage of stocks moving in an upward direction. Likewise, a bear market would consist of an abundance of stocks that are trading down. While current market breadth isn’t always indicative of future market performance, it can still give us a reasonable idea of the overall health of the market.
Another useful tool is bond sentiment. Bonds can be used as indicators of the overall economic health, and bond sentiment can give us a better understanding of what’s happening in the stock market. Basically, bond sentiment is the collective view of what people believe will happen to the prices of bonds. Specifically, it gives us an idea of how market sentiment on the prices of bonds is shifting. This can be helpful in terms of making sure you have a good handle on the pulse of the market.
Finally, charting the stock market can be highly useful. Charts give an at-a-glance view of the market’s performance over a period of time, and they can provide insight into possible trends in the market. This is a great way to track changes in the market over time and to make sure you’re not missing any signals that might be headed your way.
All in all, understanding the stock market in 3 charts – market breadth, bonds sentiment, and charting – can give you an edge in the stock market. With the right tools and understanding, you can rest assured that you have a better handle on the big picture.
