The S&P 500 remained above its 200-day moving average (MA) last week. The index is now up about 19% in the past eight weeks.  At Friday’s close, the index was at an important resistance level. That’s the dashed blue line in the chart below. I expect a quick move of at least 5% over the next few weeks. The question is whether the move will be up or down. —Recommended Link— Americans Are Ignoring This Proven Investing Method What’s proven to be safer than stocks and bonds, provides immediate payouts (of as much as $2,800… Read More

The S&P 500 remained above its 200-day moving average (MA) last week. The index is now up about 19% in the past eight weeks.  At Friday’s close, the index was at an important resistance level. That’s the dashed blue line in the chart below. I expect a quick move of at least 5% over the next few weeks. The question is whether the move will be up or down. —Recommended Link— Americans Are Ignoring This Proven Investing Method What’s proven to be safer than stocks and bonds, provides immediate payouts (of as much as $2,800 or more), and can be done every week? Come see the one thing that beats every income investment opportunity I’ve come across in 3 decades of research. This brief report has all the details. ​News should provide the catalyst for a price move. While we normally can’t predict when “news” will occur, we can safely assume there will be something about the approaching China trade war deadline.  On Sunday, CNBC noted…  U.S. and Chinese negotiators met for over seven hours on Saturday to resolve their trade dispute and avoid an escalation of the tit-for-tat tariffs that have… Read More

The bull market is back at full strength… Back in November of last year, I talked extensively about a market breadth indicator called the advance-decline line (AD line) — a technical-analysis tool that charts the number of advancing stocks minus the number of declining stocks. This indicator is a telling sign of what’s going on beneath the surface.  For instance, if the market is hitting new highs, you would look at this indicator to make sure it, too, was advancing and hitting new highs. This would show strong participation in the market and confirm the bullish trend. However, if the… Read More

The bull market is back at full strength… Back in November of last year, I talked extensively about a market breadth indicator called the advance-decline line (AD line) — a technical-analysis tool that charts the number of advancing stocks minus the number of declining stocks. This indicator is a telling sign of what’s going on beneath the surface.  For instance, if the market is hitting new highs, you would look at this indicator to make sure it, too, was advancing and hitting new highs. This would show strong participation in the market and confirm the bullish trend. However, if the AD line fails to keep pace with the underlying index, this is a sign of weakness in the market, signaling a bearish divergence. In my original discussion, I pointed out that the AD line revealed a bearish divergence in late September. A week later, the market selloff began and didn’t let up until December 24.  I touched on this indicator once again in late January, along with another one — the Coppock Curve. These two indicators, along with my Maximum Profit system, were showing bullish characteristics.  We took those bullish signals and loaded up on stocks… and we’ve been nicely… Read More

My young boys ask a lot of questions. I know this isn’t unique. Almost all young children ask questions. And after a while, almost all those questions become extremely repetitive and, in all honesty, annoying. But I’m sure I’m not the only parent who has faced a long stream of “why” questions, which is currently among the favorite questions of my little guys. I patiently answer their questions as many times as they ask because I have found myself in their situation at times. We all have. After all, “Why?” could be among the most important question we ask as… Read More

My young boys ask a lot of questions. I know this isn’t unique. Almost all young children ask questions. And after a while, almost all those questions become extremely repetitive and, in all honesty, annoying. But I’m sure I’m not the only parent who has faced a long stream of “why” questions, which is currently among the favorite questions of my little guys. I patiently answer their questions as many times as they ask because I have found myself in their situation at times. We all have. After all, “Why?” could be among the most important question we ask as investors. —Recommended Link— Your Chance To Learn From The Best Do you want to make up to $4,000 each week in the stock market in only about 10 minutes per week? Stock expert Jim Fink is holding a new LIVE, free training where he’ll reveal his 3 secrets behind his #1 investing strategy for 2019. Join him February 27th at 1:00 P.M. Eastern to learn how to make easy money each week selling stock insurance to nervous-Nelly investors. Spots are limited — Click here to register for free. This week, I want… Read More

There’s an old saying that trees don’t grow to the sky. In other words, there is a natural limit to growth. In the case of a tree, maybe the tree’s structure makes it impossible for nutrients to reach above a certain height. As with so many sayings, this one is often applied to the stock market. For example, companies cannot continue growing earnings at 100% per year forever. There is a natural limit to a company’s growth. The same is true for stock prices. I think of this old saying whenever I see a long streak of up or down… Read More

There’s an old saying that trees don’t grow to the sky. In other words, there is a natural limit to growth. In the case of a tree, maybe the tree’s structure makes it impossible for nutrients to reach above a certain height. As with so many sayings, this one is often applied to the stock market. For example, companies cannot continue growing earnings at 100% per year forever. There is a natural limit to a company’s growth. The same is true for stock prices. I think of this old saying whenever I see a long streak of up or down closes. In the chart below, you can see that the S&P 500 has closed higher for eight weeks in a row.  This is not unprecedented. There have been 30 previous instances when a streak lasted at least eight weeks. The longest winning streak on record is only 12 weeks.  So, we know the current streak will end. But what does history tell us about this scenario? When is it likely to end? And what happens after that? To help answer that question, I ran some tests to see what’s happened in the past. The results are summarized in the table… Read More

For the fourth time since this market selloff began in October, the S&P 500 has successfully broken above its 200-day moving average (MA).  If you’ve been following along with my recent commentary, then you know I’ve weighed in on this simple indicator several times in the past few weeks, due to its psychological significance. The first three crosses (all during the last few months of 2018) are marked by arrows in the chart below. Each breakthrough was short lived, and selling pressure quickly pushed prices back below the MA. Which brings me to this week’s question: Will Friday’s breakthrough be… Read More

For the fourth time since this market selloff began in October, the S&P 500 has successfully broken above its 200-day moving average (MA).  If you’ve been following along with my recent commentary, then you know I’ve weighed in on this simple indicator several times in the past few weeks, due to its psychological significance. The first three crosses (all during the last few months of 2018) are marked by arrows in the chart below. Each breakthrough was short lived, and selling pressure quickly pushed prices back below the MA. Which brings me to this week’s question: Will Friday’s breakthrough be any different?  —Recommended Link— 9 Game-Changing Predictions for 2019 Want to know where the money will be in 2019? Discover over a dozen potentially life-changing recommendations inside our special new report, 9 Game-Changing Investment Predictions for 2019. Click here for the full details now. ​To answer that question, we need to consider how the rally compares to the overall decline. The decline, which lasted 65 trading days, was sharp. The S&P 500 fell 20.2% from its intraday high on September 21 to its intraday low on the day after Christmas.  Through Friday, this most recent recovery has lasted 35 trading… Read More

Lately, I’ve been noting the importance of the 200-day moving average (MA). The first chart I want to look at this week shows that the S&P 500 failed to break above that MA.  I’ve also highlighted another section of the chart that is a good illustration of how important the 200-day MA can be. During that period, the index reached its top in October and began selling off. The initial declined when the price broke below the 200-day MA.  For almost eight weeks, the S&P 500 remained within a few percentage points of this level. Then, in early December, the… Read More

Lately, I’ve been noting the importance of the 200-day moving average (MA). The first chart I want to look at this week shows that the S&P 500 failed to break above that MA.  I’ve also highlighted another section of the chart that is a good illustration of how important the 200-day MA can be. During that period, the index reached its top in October and began selling off. The initial declined when the price broke below the 200-day MA.  For almost eight weeks, the S&P 500 remained within a few percentage points of this level. Then, in early December, the index broke sharply below its moving average, sparking a 15% tumble that reached a low of 2,351 on December 24.  In the six weeks since those lows, the S&P 500 staged a steady rally back toward its 200-day MA (spurring an increase of bullish opinions)… but it stalled out last week after failing to break through the MA for two days.  —Recommended Link— Thousands Of Americans Have Joined A Revolutionary New Marijuana Profit-Sharing Plan. Their payouts have been breathtaking. The company behind this plan sends out profit-sharing checks like clockwork, and you could quickly find… Read More

We’re barely a month into 2019, but the 2020 election season is already in full swing.  Personally, I don’t have any opinion on the candidates who have thrown their hat into the ring (other than that I’m not sure we need politicians running for president almost two years before the election, but that seems to be the current system).  Over the next two years, many political commentaries will focus on whether we can afford the programs candidates propose. Some will argue that deficits are already too high and adding trillions in spending will push them even higher.  Once upon a… Read More

We’re barely a month into 2019, but the 2020 election season is already in full swing.  Personally, I don’t have any opinion on the candidates who have thrown their hat into the ring (other than that I’m not sure we need politicians running for president almost two years before the election, but that seems to be the current system).  Over the next two years, many political commentaries will focus on whether we can afford the programs candidates propose. Some will argue that deficits are already too high and adding trillions in spending will push them even higher.  Once upon a time, governments were expected to balance their budgets, but then economist John Maynard Keynes realized that governments could stimulate growth by running deficits when the economy contracted. Keynes also suggested running a surplus to offset the deficits when the economy was expanding, but politicians seem to have forgotten about that part of his work. If they followed that advice, deficits would rise and fall, and, in the long run, the government’s budget would be balanced (in theory).  That theory illustrates the concept of mean reversion, where a value fluctuates above and below its average. Mean reversion has also been applied… Read More

I saw an interesting chart recently that I believe summarizes the current state of the stock market.  Essentially, it shows that U.S. stocks are extremely overvalued compared to the rest of the world.  Why does this matter? And, more importantly, how can we profit? Now, those are the key questions… But first, let’s use what we know as investors to unpack the information.  The chart below shows the cyclically adjusted price-to-earnings (CAPE) ratio for both U.S. and global stocks. It was developed by Nobel Prize-winning economist Dr. Robert Schiller.  —Recommended Link— “It’s like getting 26 paychecks advanced to you in… Read More

I saw an interesting chart recently that I believe summarizes the current state of the stock market.  Essentially, it shows that U.S. stocks are extremely overvalued compared to the rest of the world.  Why does this matter? And, more importantly, how can we profit? Now, those are the key questions… But first, let’s use what we know as investors to unpack the information.  The chart below shows the cyclically adjusted price-to-earnings (CAPE) ratio for both U.S. and global stocks. It was developed by Nobel Prize-winning economist Dr. Robert Schiller.  —Recommended Link— “It’s like getting 26 paychecks advanced to you in ONE LUMP SUM!” Executive Dividends are one of Wall Street’s best-kept secrets, paying out a small fortune in unannounced cash seemingly at random — and today, Nathan Slaughter shows you where to find them. Read more here. ​Source: Global Financial Data via MebFaber.com  Cyclical, in this case, means the indicator measures over 10 years, the amount of time Schiller believes covers an economic cycle. Ben Graham, the father of fundamental analysis (and Warren Buffett’s business school professor), explained the importance of accounting for the economic cycle when calculating earnings. Graham suggested averaging earnings over eight years to account for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for… Read More

Today, I’d like to follow up on our previous look at the 20-period RSI for the S&P 500 (shown in the bottom panel of the chart below). This indicator has been near a breakout for several weeks.  You may recall that the 20-period RSI is useful as regime indicator. In a bullish market regime, the indicator stays above 40. In a bearish regime, it stays below 60. In the chart, thin horizontal lines mark the 40 and 60 levels. The red zones indicate moves below 40.  Despite last week’s gains, the indicator remains below 60, which is a cause for concern.  ​ I expected a breakout last week as traders reacted to earnings from Apple, Facebook, and Amazon. Instead of a defined breakout, the S&P 500 just drifted higher.  The index has now retraced more than half of the decline that came at the end of last year. That’s bullish. But we remain about 1.3% below the 200-day moving average (MA), shown as the solid blue line in the chart. This is a widely followed indicator, and I expect the test of the MA will be a topic of conversation on CNBC this week. A close above the MA is… Read More

Since December 24, when the S&P 500 registered its lowest mark of 2018 (and a near 20% pullback from its September highs) we’ve seen a robust rebound. The index has rallied more than 12% since then.  I don’t know whether we’re out of the woods just yet… but between a couple of bullish indicators that I’ll discuss below, and my Maximum Profit system signaling four new buys last week, I’d say that the outlook at the moment is positive.  —Recommended Link— What would YOU do with an extra $3,080 every month for the rest of your life? Never worry… Read More

Since December 24, when the S&P 500 registered its lowest mark of 2018 (and a near 20% pullback from its September highs) we’ve seen a robust rebound. The index has rallied more than 12% since then.  I don’t know whether we’re out of the woods just yet… but between a couple of bullish indicators that I’ll discuss below, and my Maximum Profit system signaling four new buys last week, I’d say that the outlook at the moment is positive.  —Recommended Link— What would YOU do with an extra $3,080 every month for the rest of your life? Never worry about cash again. Be free to live how YOU want… go on a lavish vacation… or build up a college fund for the grandkids–it’s up to you.  Get your share here… Indicator #1 The first bullish indicator is one that I touched on previously, and that’s the Advance-Decline Line (AD Line). This is a breadth indicator that shows us how many stocks in the underlying index — the NYSE Composite Index in this case — are advancing and how many are declining. The purpose of looking at a breadth indicator is to gauge market sentiment, whether it’s leaning… Read More