Fundamental Confusion

This arrived in my email box today:

“The major indices have rallied over the past several weeks in response to an $11/bbl drop in the price of crude oil. Market players need the price of crude at a minimum to stabilize before sending the major averages and the broad market higher. In the near term this may be a tall order as this week traders once again bid crude higher in reaction to stepped up Mid-East tensions. My readers know that as long as crude oil remains on a roller coaster that stocks will have tough sledding. Even the energy issues which I have long advocated are having a difficult time. Investors need to remain patient until the market gives a clearer indication of where it wants to go.”

If you follow the advice above, how does it help you to answer these questions?

1. How do you determine what market to buy or sell at any time?
2. How much of a market should you buy or sell at any time?
3. How do you determine when you enter a market?
4. How do you determine when you exit a losing position?
5. How do you determine when you exit a winning position?