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THE MARKET WHISPERER 16 7

follow. Certainly an important stock such as Apple carries serious weight
in the market index, but its weight is still relative to 499 other companies
comprising the index. In other words, Apple does not have the power to
move the index on its own. This is not true for the NASDAQ 100 index in
which Apple is currently a 20% component.

I can well imagine how you are taking a deep breath and saying, “Just
WHAT does he mean? Am I supposed to know in advance when a stock is
about to rise even before it has?”

The answer is: Yes!
Is it easy to make money this way?
The answer is: No!
Apple should move in the direction that the market is trending, but you
can never know how much the market will move, how far behind it Apple
will move, and when the market will reverse.
How can we nonetheless take advantage of this information? In several
ways:

Buying

Let’s assume Apple is about ready to break out through intraday resistance
and you are weighing the risk of buying at the breakout. Now let’s assume
that just before Apple breaks out, the market also broke out to a new high.
Does the market breakout help you decide whether to buy Apple in the
breakout? Of course! Let’s also assume that the market showed a strong
breakout. Would you now consider buying a larger quantity than what you
might have initially intended? Yes! You would have considered entering
Apple because of a nice technical formation, but you reached that decision
and the quantity you chose because of the market’s “support.” Think about
the reverse case: You are considering buying Apple at the breakout, but
just before Apple’s breakout, the market breaks down. What would you
do? Yes, you must forego entering.

Turning a Profit

Let’s assume that simultaneous to the market rising, you bought Apple,
the stock rose, reached the area of profit you set, and now you’re trying
to “squeeze” a fraction more profit from the uptrend. Your finger is poised
on the mouse, and you wonder whether you should press that sell button.
The market stops moving up, and suddenly begins to correct down. This
will usually occur just before Apple will also correct. Is this the time to sell
and turn a profit? Of course it is. Because we have already learned that