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THE MARKET WHISPERER 16 9

which institutional funds do not invest, and are therefore less sensitive
to the moods of institutional traders as these moods manifest in market
direction. Usually these are stocks priced at less than $10, which we will
learn more about later. Be wary of these stocks unless you have gained a
lot of experience.

Sometimes a stock will have “a life of its own” when special
announcements are made. An example would be the publicizing of
an important announcement concerning a stock, when an analyst’s
recommendation goes live or is changed, when quarterly reports are
made public, and so on. In such cases, the stock may move irrespective of
market direction, though it will still be affected by market direction. For
example, the market may drop while a specific stock rises. Nonetheless, if
you compare the stock’s movement relative to that of the market, you will
see that every time the stock executed an intraday reversal, it was closely
synchronized with the market’s intraday reversal. In other words, when
the market corrects down during a downtrend, the independent stock will
correct down even though it is showing an uptrend. This means that even
if you are trading in a stock that is moving against the market trend, you
still need to examine every move in the market’s trend.

Note:
All the principles noted above are also relevant in reverse for stocks

that are in a downtrend, i.e. for shorts instead of longs. If, for example, the
market is rising and on that same day, a certain stock in which we wish
to execute a short is dropping, it is still moving according to market
direction. While it is dropping, despite its direction being the opposite
of the market direction, it will correct up each time that the market index
goes up, and will go back to dropping each time that the market index
drops. By the end of the day, the market could end with highs and the
stock with lows, but the intraday movement will be strongly influenced by
market direction.

Index Symbol

Different trading platforms may present the same index under different
names, but with the same basis. If you wish to find the SPX index, you may
need to search for an identical or closely similar symbol: SPX, $SPX or SPX$
- the same symbol with a dollar sign before or after it. If none of these
symbols matches your graph software, use the symbol search field to look
for the term: S&P 500.