The Chartist takes a purely technical view towards the market. Its analysis is based on the price action of the major market averages, the price action of individual common stocks and many widely followed technical indicators. Chartist editors use their proprietary market indicators to measure the risk in the market, first measuring the overall trend of the market averages and when the averages are in sync to the upside they then employ their relative strength methodology to over 7000 individual stocks. Relative Strength is a technical methodology that measures the price action of a given stock against all other stocks. In every bull market a select group of stronger than market stocks will invariably emerge as market leaders and have the ability to outperform the averages by a wide margin. These are the securities that The Chartist want to be invested in. Their methodology is often very difficult for most investors to employ because it calls for purchasing stocks after they have made price gains. The average investor finds this excruciatingly difficult to do. After all it is contradictory to conventional wisdom, which is to buy low and sell high. This premise certainly seems logical enough but what investors overlook is the fact that a depressed stock is weak for a reason and can remain that way for a long period of time. In contrast, a strong stock has already demonstrated its ability to score big price gains. A stock’s ability to make substantial headway versus the rest of the market is one of the telltale signs of its potential to be among the big winners of a bullish cycle.
