You may be right about a stock, but if you're wrong about, or not paying attention to, the market's direction, you could suffer losses. Three out of four stocks will go down when the market declines. If you initiate purchases when the market indexes are beginning a downward trend, you can run into trouble.

This is a time to be patient and watch for the stocks likely to lead the market in the next upswing. The lesson titled "Leading Stocks Are Leaders For A Reason" explains how to spot emerging leading stocks.

That's why it's important to understand how the general market is acting. With enough study, signs of a reversal become clear. The Big Picture explains the forces moving the market in plain English to help you evaluate the pivotal points in trading activity. This feature is on IBD's front page.

ARTICLES: SPOTTING TOPS AND BOTTOMS

Related Resources:

Click here to get the 7 Steps For Selecting Winning Stocks, according to the CAN SLIMTM Investment Research Tool.

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