Well, by now everyone has pretty much accepted that we’re in a risk-off market environment. The public is starting to panic, as the unwind of the carry trade in the Japanese yen triggers margin calls across the world. I raised a substantial amount of cash over the past couple of weeks, and even had members in chat take some long positions in the Japanese yen. Back in March and April, I did a Mastermind seminar here at TheoTrade where I dubbed 2024 as the biggest opportunity since 2020. The most important thing now is to not make any hasty decisions. In the meantime, let’s review what we’ll want to see from a sector standpoint to signal that a low is near or completed…  Trade the Tape, Not the News To be very clear – this is still a risk-off tape. As evidence, we have utilities as the top-performing sector on

Over the past couple of weeks here in Sector Leader Bullseye, I’ve been ringing the alarm surrounding the flow of capital into defensive segments of the market. In fact, I felt so strongly about it that I was compelled to do a special session on Wednesday on the cautionary rotations taking place underneath the surface of the market.  One of my big concerns right now is that the Fed is late to the rate cut party. We saw the Bank of England cut rates 25-basis points this week, but the even bigger surprise was the Bank of Japan, which finally put an end to NIRP (Negative Interest Rate Policy). The problem now is that the risk-off capital flows are accelerating, and I think we could be in for some real turbulence in the weeks ahead. Check this out… My Risk Dashboard Is Clear: Risk-Off Have a look at my sector

Between election season, economic data, and September rate cuts all but confirmed, markets are fresh off a volatile week of trading. In fact, Friday’s rally staved off what could have been a cataclysmic close to the week. In recent weeks, I’ve made a point of updating you on some of the cautionary capital flows taking place in markets. First and foremost, we have the Dow outperforming the Nasdaq – that’s hardly a risk-on signal. But check out these other sector updates that suggest treading carefully is the prudent thing to do in the coming weeks… Healthcare Can Thank Biotech for Its Bid     The top-performing sector last week was healthcare, which certainly has some defensive elements associated with it. Think about this: Even when the economy slows, healthcare is one of the last budgetary cuts people are willing to make. Even so, I give biotech, a sector I’ve been

Markets have been all over the place this week, but there’s been a true diamond in the rough amidst the turmoil – biotech. As a reader of Sector Leader Bullseye, you’ve been in the loop as to what’s transpiring in this sector, and the good news is that it’s still early.   Yesterday, I unveiled my  A.I. Timing Webs research with Don. Towards the end of the presentation, I shared my bull case for biotech, and tied it into what’s happening in the artificial intelligence front. In other words, the artificial intelligence revolution is still in its early stages when it comes to medical technology and healthcare, which means there’s going to be no shortage of tradable opportunities in the sector.   It’s the main reason why I’m so excited about yesterday’s launch of A.I. Timing Webs. Head on over here and check out the replay if you haven’t –

I hope you paid attention to my warnings in the past week about the market’s abrupt shift to “risk-off” status. This was plainly evident by the flight-to-safety trades in the stock market, and capital seeking refuge in defensive sectors. With that being said, our strict adherence to relative strength principles has allowed us to weather this market pullback well. Biotech, especially, is showing relative strength, and once this selloff is complete, I would continue to look for more leadership in this sector. And it’s not just biotech that’s holding up well – crypto and precious metals are showing signs of life, and the strength of our positions in this space point to further outperformance on the horizon.   In the meantime, I wanted to update you on an important event I’m hosting tomorrow, where I’ll be discussing A.I. Timing Webs. Go here and make sure you’re signed up.  If you’ve

Hello TheoTrader,   Stocks were mostly lower last week, with only the Dow Jones Industrial Average finishing in positive territory. This blue-chip index’s outperformance in recent weeks is a testament to capital seeking areas of safety right now. The biggest risk I see in markets right now isn’t coming from the Fed, monetary, or even fiscal policy. Rather, it’s the seemingly ever-shifting political winds, switching direction yet again this weekend as President Biden dropped his re-election bid. I’ll put it this way: All of the capital flows we’re seeing in the near-term are indicative of this market being late-cycle. Here’s what I mean…   The Hard Asset Theme     Look at the sectors that have captured the leadership positions over the past month, energy and real estate. These both fall under the hard asset category, which speaks to the turbulence in the fiat-money system over the past couple weeks.

  After stocks were bid for about three months straight, we finally saw our first bit of real selling this week. Semiconductors and technology led the selloff, which is a concern given the tendency of those sectors to act as leading indicators. This led to the Nasdaq suffering the brunt of the selloff, as it tumbled lower much more compared to the Dow Industrials or S&P 500. The good news is that this is totally normal price action. That is, it’s not uncommon to see the chips, tech, and the Nasdaq lead on the way up and on the way down. It’s also not uncommon to see the Dow peak after the Nasdaq. One notable exception was the Dot-com Bubble, but during most other market declines, we usually see a flight to safety into the Dow at the expense of the other indices Here’s what that means…  Why the Dow

What a week it was. Between failed assassinations and lower-than-expected inflation reports, it appears that markets are now on a one-way road to September rate cuts. Stocks are at new all-time highs, and the consensus on rate cuts being bullish for stocks continues to grow. I’m pleased with the sector performance rankings that I’m seeing right now. While we’re still “risk-on,” I am noticing some “lower-rate plays” coming into the picture, which is increasing the odds that an economic slowdown is on the horizon. Here’s what I mean…   Real Estate’s Return – Bullish or Bearish?     Check out last week’s top-performing sector: real estate. Granted, this sector consists largely of real estate investment trusts (REITs), but it still offers a decent bellwether in terms of sentiment in the space. If you go online, there’s no shortage of bearish data on real estate. Between banks holding bad loans, to

It’s no secret that the “Magnificent Seven” stocks have been a significant driver of returns to the upside in the indexes. I do, however, take issue with the notion that those are the only stocks pushing this market higher. Of the “Magnificent Seven,” there had been only one real laggard – Tesla. But, in case you missed it, the electric automaker finally snapped out of its funk, and exploded higher in the past couple weeks. Those trading with me in the TheoTrade chatroom were able to capitalize on this move. Here’s how we did it… How Tesla Finally Got It in Gear I’m going to walk you through the technical components of this trade, but first, I want to address the sentiment surrounding Tesla over the past few months. Granted, this isn’t something that can be taught outright. Rather, it comes with experience and observation. Tesla was notably lagging its

Markets are back in full swing this week, and I have to say I was pleasantly surprised by the price action last week. Both the Nasdaq and S&P 500 exploded to new all-time highs, but the Dow continues to lag behind. We also saw a notable rally in precious metals, which together with stocks, has the cleanest uptrend in the market right now. After last week’s surprise, you may be knocked on your heels when you see what the top performing sector last week was. Here’s a spoiler: It isn’t bearish…   There’s a Consumption Dichotomy Playing Out   The top-performing sector in the S&P 500 last week was consumer discretionary. In fact, the rally was so strong, it even overtook consumer staples with respect to year-to-date returns.It’s like a law of nature: When consumer discretionary outperforms consumer staples, it’s a risk-on signal. This is the market’s way of saying