Weekly Update: New All-Time Highs!
Good evening, and welcome to this week’s edition of Stealth Trades!
The Nasdaq and S&P 500 indices both made new all-time highs today.
Back in April I advised readers that the low was in, and it was time to start buying. I predicted that the market would make new highs by the end of the year. But even I didn’t expect the recovery to be this quick.
But you’re not too late…
In all likelihood, we have another 12-18 months of bull market in front of us.
Stocks surged in April in May before digesting the move this month. And now, the breakout is underway.
If you attended one of my live webinars last week, you saw me lay out our go-to breakout pattern for explosive returns.
This pattern has appeared in many of the best-performing stocks of the decade – right before they began their ascent. And the indexes are no different.
The chart above is the S&P 500. Trump’s trade war caused a big dip. But notice the shallowing consolidation we have seen over the last several weeks. This is the market “digesting” the move.
Traders like us who bought in April were taking profits. New money was flowing in from investors scared of missing out. Over this period, equilibrium was achieved, supply was absorbed, and stocks are now free to resume their march higher.
The nuclear theme continues to play out and remains the top-performing area right now along with crypto, AI and metals.
We are also beginning to see strength in the defense sector. This is unsurprising given the macro picture. Trump is also pushing NATO countries to increase their defense budgets to 5% of GDP. This would send billions to the big defense contractors like Boeing and Northrop Grumman.
I will continue to keep you informed of any major shifts in these institutional buying patterns.
The best performing stocks right now are nuclear, quantum computing and AI names – CRWV, QUBT, CCJ, SMR, IONQ, OKLO, GEV, PLTR and HOOD to name a few. I would buy any one of these stocks on a pullback to the 20-day moving average, a 3-week tight consolidation, or a clean breakout to new highs.
Right now, the wind is at your back. You have a strong bull market making new highs, clear market leadership, low inflation, expected rate cuts, and a ceasefire in the Middle East. So, you don’t need to wait for perfect setups. The important thing is just getting into the right stocks.
Palantir (PLTR) as you can see below, is buyable at any pullback to the 20-day moving average.
Robinhood (HOOD) follows more of a traditional stair step pattern (see below). It will run, consolidate, run, consolidate, over and over. When you see it consolidate for 1-2 weeks, get ready to buy when it breaks out to the upside.
Don’t overcomplicate it. Bull market, leading groups, top stocks. Stick to that and it will be hard to mess up.
Best wishes for your trading,
