Weekly Update: Stock Market Bulls Face an Important Test Ahead
The major indexes tacked on gains this week, as the most recent consumer price index (CPI) numbers showed that inflation is slowing.
I pointed out a few weeks ago how commodity prices and other input prices were falling, which would lead to slowing inflation as they worked their way through the supply chain.
I also showed you the internal market metrics that led me to believe stocks have bottomed and we are at the start of a new bull market.
One of those bullish indicators is the 90% up-day.
I like to look for days in which more than 90% of trading volume was advancing.
Historically, these days signal a reversal in the market as large institutional investors pile into stocks. We saw two of them in late July, represented by the green arrows on chart below.
And we saw another one on Wednesday after the CPI report was released.
The number of stocks above their 50- and 200-day moving averages continues to increase as well.
From a technical perspective, the S&P 500 and Nasdaq are both approaching their 200-day moving averages.
This is a key level for any stock or index that often serves as support when trading above it and resistance when trading below it.
We have not seen a significant pullback in over a month, so don’t be surprised if we get one there.
Portfolio Review
Our official Stealth trade in McKesson Corporation (MCK) continues to play out nicely.
The stock is now up roughly $25 per share, or 7.5%, from where we recommended buying last month.
Our latest trade in Intra-Cellular Therapies, Inc. (ITCI), on the other hand, was stopped out earlier today at the $54 stop level.
This trade made an initial move above $60 per share last Friday but was unable to hold above that level.
Today, it broke through its 50-day moving average and eventually triggered our stop for a loss of 9.9%.
Stealth Trades Watchlist
Going forward, your Weekly Updates will look a lot more like this one…
They’ll include more information on our current stock recommendations and put less of a focus on our weekly Watchlist.
Don’t worry – The full Watchlist is still available on our website right here!
But it’s important to remember that not all of the stocks on our Watchlist are actionable.
When it’s time to make an official recommendation for our Trade Tracker, I’ll let you know on our Alerts page right here!
Join the Insiders
Now, if you’ve ever wondered how I developed a proven track record of trading along the insiders like corporate CEOs, CFOs, executives and board members…
Do yourself a favor and check out my latest Insider Effect presentation!
Corporate insiders are always buying or selling shares in the companies they operate. These folks have a footing of knowledge that Main Street investors simply do not.
I covered my strategy for trading alongside corporate insiders and generating potentially massive gains as a result.
Live Coaching Session
Monday, at 3:00 p.m. EDT, we’ll be hosting our regular weekly coaching session for Stealth Trades.
We’ll send you a login reminder that morning, just so you don’t forget.
We’ll cover all of our new stocks on the Watchlist as well as the rest of the stocks inside Stealth Trades.
You need to attend this session to get the most from your subscription!
In the meantime, you can watch the replay of our latest Stealth Trades session right here.
Best wishes for your trading,
Ross Givens
Editor, Stealth Trades
P.S. Click here to learn more about my Insider Effect strategy and see what you could be missing out on.