Paul Thornton

Timing the Market. Market averages is the net effect of all the money in the market. When it starts acting differently, going down, you are able to get out of the market. On April 16 the market changed its behaviour giving a series of losses on higher volume and giving lower lows and lower highs.

Categorizing Stock by Condition. Stocks that are poor performers i.e. going down when they market is going higher, are not worth looking at. Big money goes after the high-growth stocks in the best sectors. When these change, you know the market overall has changed and you can make different decisions.

Very good performer in the bull market. Chart now shows it a long way off its high and it has broken down through the range that has been holding up and is now hitting lower lows. This indicates the stock in poor condition.

Continues to trade up near its highs and is trading in a very take range in the highs. This is a sign that the investors in it are not selling.

(A Top Pick Nov 13/09. Down 23%.) South American homebuilder. Emerging market stocks have really dropped off from that time. Avoid this one for now.

(A Top Pick Nov 13/09. No change.) Gold market has been flat since that time and golds stocks are essentially treading water in a basing process. Chart is showing a pretty good set up in May and June but still below the old high. Once it begins an uptrend, then gold and silver will really take off.

(A Top Pick Nov 13/09. Down 14%.) Rare earth materials company. Now range bound and it's back to its lows. The range is in is still well above the point where it blasted off from. When it breaks out again, they can make another large gain. Watch.

Was trading well above its high and then broke down through its consolidation and has established a lower low. This is a very bad sign. Was a huge winner in the 90s and another one in the market of 02-08 and it is rare for huge winners to repeat. Will continue to have net selling over a long period of time.

One of Canada's bigger resource plays. Went through a major decline since the beginning of the year. Very sharp decline in a short period of time in January making it damaged goods. Bounce back didn't take it very far. 45% decline indicates big money is not interested. Dead money and it's going to go lower.

Where would you put cash if a double dip were in sight? If we are in the double dip, as investors we don't need to figure that out, but just what the market trend is. Market blindsided us this week making new buys very unreliable.

Gold stock and just continues to keep chugging higher. Stock is clearly on fire but the risk is the length of time it has been going higher. Up 45%-50% from the last base of $5.50. How much more can it go before it goes into a significant downturn? You might have a better risk-controlled price later on.

Behaviour of investors changed in mid-January when it undercut the uptrend. Money is now coming out of uranium. No attractiveness from an investor's standpoint.

Trade Template. Use an S&P 500 chart and draw a line from the high in April down to the high in June. That is the range the market is trading in. Market is unable to cross over the line on a short-term basis. Most investors should not try to make any money in a correction. If you are going to trade, do it in a trading range the chart shows.

Time Frame in Perspective. Chart shows strong upward trend in the last 52 weeks. Currently range bound since the correction started but it is trading closer to its high. Looking at this stock on a longer-term basis, it and many others like it are closing in on their old pre-bear market highs. It is normal for investors to sell stocks when they get back near their highs.

US and Chinese market have been step in step since 2002-2003 but the Chinese market peaked last November and is actually in worse condition now than the North American markets. Doesn't seem to be the leader anymore, otherwise it would be trading better.