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One major key to making money in the stock market is to be able to predict what will happen in the future. Of course, no one can literally do that, but good decisions can be made by charts and
statistics. For example, if the stock market has been in a downtrend for six or seven weeks in a row, there is a very good chance that a big rally is about to take place that could easily last a
month. Therefore, if you position yourself in a good stock or ETF after week six of the downturn, you will probably make a significant amount of money in the following upside rally that could last
for weeks. Just be certain to sell while you are up, and you will make a fortune.
In addition to the general trend of the stock market, there are ways to predict when certain sectors will rise and fall. Several sector index charts have been made, and they are listed as "bullish percent indexes." For example, oil can be tracked by the chart of $BPENER. When the chart is high, you need to sell oil stocks to protect your profits. When the chart is at 37% or less, you need to buy oil stocks or a good oil ETF like ERX, Direxion 3X Energy Bull. Other bullish percent indexes are listed below along with a suggested ETF to buy when the sector is going up.
Also, you can look for oversold indicators on the bullish percent charts as well as MACD crossover signals from the bottom. In this way, you will assure some kind of profit from buying at the bottom.
Another area to look at for predicting the future is to find out what bonds are doing. If bond prices are going down, then it may be a good time to buy stocks. One chart to watch for this scenario
is TLT, 20 Year U.S. Treasury Bonds.
Finally, if you want to get an idea of what stocks are in the ETFs above, you can go to Yahoo Finance and find that information. You might be more apt to buy an ETF if you know one of your favorite stocks is a top ten holding of the ETF. The table below shows some of the top ten holdings for the ETFs discussed on this page as of July 2011.