Investor Spotlight

Market Fools the Majority

The most recent sentiment survey done by the American Association of Individual Investors last Wednesday indicates that the smaller US investors (retail investors), were the most pessimistic about the stock market. 48.2% were bearish but only 21.7% were bullish. The gap of over 26.5% in favour of the bearish sentiments is the 10th time we have noticed such a huge gap since July of 2009. Historically $SPY has performed an average gain of +9.8% during the next 3 months after such an extreme bearish sentiments. Interesting data that no one in the media talks about. The most recent times that we had such a divergence was in mid Feb 16 and Dec 24th (Christmas eve) of 2018.

We had a "Follow Thru" day on Friday Jan 4th 2018. $SPY gained +16.50% while the growth stock index $QQQ gained +22% within 4 months. IBD (Investors Business Daily) style growth stocks tend to perform 1 and 1/2 times better than the $QQQ. Data suggests that with such extreme bearish sentiments in the market, we could see $SPY gain on an average +9.8% in the next 3 months. Its quite possible that one could expect the year end results to be:

$SPY ... 3,200
$QQQ ... 205

Just a cautionary word about the predictions of the market. No one can predict what the market will do. There are dangers when you extrapolate the data. Market just doesn't go straight up in a linear fashion. It zigs and zags with stomach churning volatility. We just witnessed that in the last 2 weeks. We have already had 3 good days of rally in the market last week. We may be just one day away from changing the market pulse back to "Market in Confirmed uptrend". Patience is the key right now. Building an actionable Stock Watch List is prudent right now. Every retail investor should have done the home work over the last 2 weekends to scan for Growth Stocks that will be the next leaders in the market.

New Leaders

It's quite common to see new leadership stocks emerge with the next "Follow Thru" day. We are getting to the tail end of the earnings reports for the 2nd quarter. Some of the characteristics of new leaders would be:

Stocks that gapped up +5% or more with volume 3 to 5 times greater than the average daily volume.
Stocks that held up above the 34 day ema(exponential average) while the market was correcting over the last two weeks.
Stocks that are showing RS ratings above 94 and the RS line on IBD stock charts at all time high before the stock makes a new high.
Look for stocks that are breaking out in the next couple of days as we head into a possible "Follow Thru" day.
Stocks that are bouncing off the 50 day sma (simple moving average) or 200 day sma in volume that is decidedly higher than the average daily volume.

Mentoring Program

I shall be opening up a few slots in September in my Mentoring Program. June and July training slots were very quickly snapped up and both of these months provided lots of opportunities for some quick profits in the market. I will make a spot or two available in August if you are serious about speeding up your learning curve. We have already attained +25% gain with the leading growth stock index $QQQ year to date. Historically our best quarter is from October thru Dec. It's quite possible that we could have an additional +13% gain in the next 5 months. Now is an ideal time to learn to trade and invest utilizing growth stock strategies of IBD(Investors Business Daily).

Schedule a FREE 30 minutes of "Discovery Call" with us and investigate how our program can help you learn the basics of reading the Stock Charts:

How to find the winning Growth Stocks?
How to Buy the Stocks Right?
How to Sell the stocks Right?
How to TIME the market?
How to protect and harvest your profits?