Anyone would think the markets were suffering from an onset of schizophrenia by the way they've been acting lately.
One second, all is well. . . buyers line up to chase the recovery. The next, buyers are swimming for the exits in a sea of red ink.
Not exactly the kind of "confidence" you'd expect in a recovery, is it?
But while negativity is abundant, a bull market is never far away. . . and you can easily find it by using the three technical indicators I've written about before.
Or, by using themes.
I'm going to give you some examples. . .
Resolution Profits
It's a seasonal phenomenon that many of us are all-too familiar with.
This year is likely to be no different, as millions head into the winter holiday season rummaging through our kids' Halloween candy, anticipating the traditional Thanksgiving gravy and stuffing, and marking our calendars for December holidays and office parties. . .
The end of the year marks the time when we assess the pounds we've packed on from pumpkin pie and eggnog and start worrying about added "baggage" — and promise ourselves that next year will be different.
How do you profit from this predicable trend? You find the stocks, namely ones like eDiets.com (DIET), that have historically risen at the tail end of the year on New Year's resolutions. The trick to playing this stock is to buy during mid to late November.
The stock should then rise as people begin promising themselves that next year will be the year for weight loss, and sign up for diet and exercise programs.
We haven't noticed the same run in stocks like Weight Watchers or NutriSystem that we have with eDiets.com (DIET), though:
-
From around mid December 2003 to the start of 2004, DIET ran from about $3.50 to about $6.50.
-
DIET ran from $3.25 to $5.35 from mid December 2004 to the start of 2005.
-
From mid December 2006 to the start of 2007, DIET sold off after an early November 2006 run.
-
And from the end of November 2007 to the start of 2008, DIET ran from about $4.60 to $6.
DIET is a seasonal — and very predictable — thematic mover, as you can see by most of the posted gains. Buy and hold.
Another way to trade themes is to watch the press. Take H1N1, for example. . .
H1N1: How to Live High on the Hog
It's all about swine flu these days. Millions of kids have been out of school.
