Technical Tuesday - How Your Actions Today Could Pay You for the Next 2 Years
Right now we’re seeing huge Demand returning to the market.
In fact, we’re in a brand new bull market.
This is exactly what I’ve been telling you to look out for.
If you follow my Sector Focus Facebook page, you know I recently told my followers (on November 9)…
“The midterms will tell the market what to do with its trillions. So we are watching closely to see where things land and we'll know what to do -- probably for the next two years.
Hard to believe it’s that easy but it is.
My guess is we've seen the bottom and I think if CPI data crushes the market tomorrow it will create the last chance to take a bullish position before the remainder of this second-strongest quarter”
Well, the CPI data did crush the market. It came in at 7.7%, beating expectations.
And the PPI rose 8% in October, down from the 8.4% print from September.
The S&P 500 responded by gapping up +5.5% on massive volume (the purple arrow).
(Click any image to enlarge)
The Dow Jones gained +3.69%, also on heavy volume.
But even putting the CPI data aside, Demand was bound to return, given how washed out the market had gotten. With all of the sellers shaken out, prices were bound to rise.
And now, with the election results in (sorry – no red wave)... The market (which hates uncertainty) can now begin deploying capital into a few favored sectors.
I’m happy to say that some readers are taking my insights to heart.
A reader named Buddy commented by saying, “Thanks for your guidance Chris. I've had my most profitable year ever with your help.”
Over the next three quarters, I hope to guide you to your most profitable year as well.
To do that, to really see that Demand has taken this market by the horns, we’ll look to the Internal market – to market breadth.
Our #1 breadth indicator – the bullish percent index (BPI) chart – shows that we’re undoubtedly in a new bull market. Demand is in control no matter where we look.
Mega-Caps? Demand is in control!
Mid-Caps? Small-Caps? The Nasdaq? The NYSE?
Demand controls every one of those markets.
Here’s the NYSE BPI…
Here’s the S&P…
The S&P 400 (mid-caps)...
The Russell 2000 (small-caps)...
The Nasdaq Composite…
Every one of those charts is in a column of X’s. That tells us that Demand is in control over the short term.
All except the NYSE are on point-and-figure Buy signals. That tells us those indices are strong over the longer-term as well.
As you can see by this view of the US Industry Bell Curve (one of the premium tools available on Sector Prophets, our data platform)...
Demand now controls 44 out of 45 sectors.
By the way, if you’ve seen the Bell Curve before, and the above image, and some other images in this article, look a little different from what you’re used to…
That’s because you’re seeing the Curve as it will appear on our soon-to-be-released, re-vamped (and massively improved) website.
We’re almost ready to go public with this new iteration, but I wanted you to get a sneak peek.
As you can see, right now there’s just a single sector in the hands of Supply – the red Telecom sector (TELE).
Up until recently, the Oil Service sector was ranked #1 out of the 45 groups we track. But now the institutions have begun pouring their trillions into other sectors.
And in the top third of the Matrix we find sectors that are cyclically sensitive to the economy – Buildings… Chemicals… Steel Iron and Metals Non Ferrous.
(I discuss this new market landscape on today’s episode of “Tuesday Morning Quarterbacks” with Costas Bocelli and Bill Spencer. If you haven’t watched an episode of this new video series yet, you’re in for a treat. Bill and Costas both give some very strong, actionable trade ideas in these sectors. “Big Bill’s” pick is already up +3%.)
And by the time you read this, I’ll have held my latest free investor briefing – the “Midterm Money Summit” where I reveal additional ways for you to play this new, post-election bull market.
I can’t stress this enough. The giant institutions have begun throwing their chips onto the table. The sectors they pile into now, and over the next three quarters, will almost certainly be the strongest sectors for the next two years – possibly longer.
If you’re not getting into position now, you risk missing out on a once-every-four years opportunity.
So subscribe to my YouTube channel. And begin watching “Tuesday Morning Quarterbacks” each week. Monday is a very telling day. Come Tuesday, the giant institutions will have begun tipping their hand (via price action) about what they’re up to for the remainder of the trading week.
We’re here to help you read their cards and spot their “tells.”
Thanks for reading.
Founder and CEO, True Market Insiders
“You see it in the price before you see it in the news.”