Wednesday, 13 February 2008

"Industry Group Movements"

"Livermore deduced from observation that stocks did not move alone, when they moved. They moved in Industry Groups. If U.S. Steel rose then sooner or later Bethlehem, Republic, and Crucible would follow along." "The most intelligent way to get one's mind attuned to market conditions and to be succesful is to make deep study of Industry Groups in order to distinguish the good groups from the bad: get long of those which are in a promising position and get out of those Industry Groups which are not." Jesse Livermore: How to Trade in StocksNote example: The charts illustrated above are a reflection of the "Chemical Fertilizers" Group. Early 2007, the rise of fertilizer demand in China and India and the rise of demand for ethanol and biofuels contributed to the meteoric rise in the share price of their stocks.

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