A good trader or investor should always be on the lookout for warning signs
of a correction, so MoneyShow's Tom Aspray offers a technical review
to illustrate how formations in the weekly and daily A/D lines can warn in advance
of market corrections.
In the last trading lesson, Tell
Tale Signs of a Correction, I explained how combining the analysis of the
weekly and daily A/D lines can warn you in advance of sharp, double digit corrections.
At the time of the original article, I pointed out that there were no signs
of such a significant correction but pointed out that a good trader or investor
should always be on the lookout for the warning signs. Since then, most of the
major averages have made further new all time highs.
Now, the warning signs differ from correction to correction and 6-10%
can often be more difficult to spot in advance. In this continuation of the
original article, I would like to review some recent examples of three corrections
that have occurred in the past ten years.
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