Daily stock advice is important to have no matter what your style of investing. The stock market's character can change in as little as three days. If you want to manage your investments properly you need to know what is happening in the markets daily.

The Stock Markets Mood Swings

In October 2002 the stock market had been in a nasty two and a half year bear market. The NASDAQ had declined nearly 80 percent in two years, millions of people lost millions of dollars. Corporate fraud was hitting the headlines daily, highlighted by Enron and WorldCom.

Yet an odd thing happened. On October 10th, 2002 the NASDAQ rallied a strong 4.4 percent. A rally all by itself is not all that special but what happened three days later showed the winds of change. On October 15th the NASDAQ followed through on its previous rally with a stronger 5 percent move on massive volume. After over three years, the stock market ended its bear market in just four sessions. Those who were paying attention to the market and not the headlines understood what was happening.

Fast-forward a year and a half to January of 2004 and we will find the next stock market top. The headlines were good. GDP was growing at the fastest rate in 20 years, corporate profits were strong, and the NASDAQ was up 85 percent from its October low. Even with all the positive news headlines the stock market was showing signs of trouble. January 27th, 28th 29th and February 4th were all sessions when the NASDAQ sold off on heavier volume than the day before. Investors paying attention to the daily action of the market could have avoided most of the 18 percent decline the NASDAQ experienced over the next eight months.