Market Update: Are We Going Straight to New Highs…
Was that it?!?!
We warned repeatedly that stocks were due for a pullback… but thus far any and all weakness in the S&P 500 has seen dip buyers appear in droves.
Truthfully, S&P 500 traded down for five days straight the week before last, but Friday was the ONLY day that saw pronounced selling pressure in the markets. As a result of this, the pullback was only a mere 3% from peak to trough.
Since that time, the bulls have stepped in a big way, with stocks rocketing higher. As I write this over the weekend, the S&P 500 is already back within spitting distance of all-time highs!
This is extraordinary when you consider that prior to this shallow pullback the S&P 500 went practically straight up for 3 months! Surely after rallying ~30%, stocks are due for more than a mere 3% drop!
That remains to be seen. Multiple market leading indicators (high yield credit, breadth) are signaling that the next leg up is already here. Moreover, as shallow as this pullback was… the percentage of stocks trading above their 20-DMA fell to levels at which corrections usually end. Put another way, the only times a greater percentage of stocks have broken below their 20-DMAs was during bear markets or significant market meltdowns (the SVB regional banking crisis, the tariff wars, etc).
Add it all up, and the odds favor that the lows are in, and stocks are due for new all-time highs in the near future. And based on the current reading of our proprietary stock market crash indicator, we urged our clients to take advantage of Friday and Monday’s weakness to aggressively buy stocks.
That’s the great thing about quantitative metrics that can accurately predict market meltdowns, they not only work to tell you when to get out of the markets… but they ALSO tell you when a pullback is likely to be shallow and it’s time to “back up the truck” and buy with both hands.
If you’d like to put this amazing tool to work for your own investing, we detail this proprietary trigger, how it works, and what it’s currently saying about the markets in a special investment report How to Predict a Crash.
Normally we’d sell this report for $499, but in light of what’s happening in markets today, we’re making just 99 copies available to the investing public.
To pick one up…
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research