The Magazine Cover Indicator
One of the most powerful technical stock market indicators is the magazine cover. What does a bull or a bear on the cover of a popular magazine tell you about future trends in the stock market? It usually means that the trend is very mature and that most people have accepted this trend as a fact.
Many people think that the public is always wrong when it comes to the stock market. This is not true! The public is right for most of the trend but wrong at the end! They are wrong when the trend has reached the point where it is common knowledge and everyone is on the band-wagon. This is the point where the bull or bear will be featured on the magazine cover.
What to do when you see a Bull on the Cover of a Popular Magazine
This is the time of maximum risk in the stock market. The bull trend has matured and is at risk of topping out and developing into a bear trend. Start to take profits and build your cash positions. A defensive position is required to preserve capital through the coming bear phase.
What to do when you see a Bear on the Cover of a Popular Magazine
This is the point of maximum profit potential in the stock market. The bear trend has matured and will start to form a bottom. A new bull trend is just around the corner. Start to position your portfolio to take advantage of this new bull market by building positions in quality stocks.
