August 10, 2010 - In his new audio interview, Elliott Wave expert and NEoWave founder Glenn Neely advises on specific trading strategies to survive the current challenging market. Based on his 25 years of trading and forecasting experience, Neely describes the three phases of all markets, and he provides advice on the best trading strategy to employ in the current market phase. The three market phases are: Bottoming/Topping, Accumulation/Distribution, and Trending (up or down).
"The current phase of market action is most likely Distribution," Neely explains. "We've rallied significantly off 2009's low, and since January 2010 the market has been forming a top." What type of strategies should traders use during this Distribution phase? "The focus should be ‘selling into strength' as the market prepares for a top over the next few months. In this period, overbought and oversold indicators work the best. Look for overbought signals to sell into those overbought conditions, with stops above the market. Get out of your short positions when the market is oversold. Most important, focus on protecting capital, select trades carefully, and avoid big, risky bets."
What's next? "After the stock market tops, probably before December 2010, we'll start the final - and most treacherous phase - of this bear market, which started at 2007's high," Neely adds. "Keep in mind, a Trending phase can produce the biggest profit potential at the lowest risk, over the shortest period."
Click to hear Glenn Neely's 20-minute interview: "Trading Strategies for Today's Difficult Markets."
In the next interview of Glenn Neely's "Stock Market Predictions 2010" series, Glenn Neely will introduce his revolutionary Neely River Technology. Neely River focuses on how to manage trades in an unpredictable market environment - how to enter positions, move stops, and exit positions without requiring any market perspective or forecasting expertise.