It’s a holiday week for markets, with exchanges closing at 1PM Eastern on Wednesday, and closing completely on Thursday for Independence Day in the United States. But nonetheless, the market remains on the move. Be sure to take some time away from the screen this week. Admittedly, I have a problem with it too, but since I’m hosting the party this year, I’ll have help from friends and family to unwind for a bit. In the meantime, I noticed a potential shift in sector leadership last week, and if it continues, will be very important for your portfolio. Have a look…  This Leading Sector Is Surprising Have a look at the new one-week leading sector in the S&P 500 – it’s energy. This may be surprising to some considering last Friday’s relatively muted inflation report. Remember that the market is forward-looking, and economic data is backward-looking. Despite the muted inflation

I’m always looking for the next potential market leader. Anyone paying even the slightest bit of attention knows that semiconductors and technology have been the main drivers of this bull market… so far. But for any bull market to sustain itself, there needs to be expanding participation – this market can’t just be a one-trick pony. Lately, I’ve started talking about one particular sector more, and it falls under the umbrella of an even broader, very important sector: Healthcare. Healthcare is the second-largest sector in the S&P 500 behind technology. My thesis here is that there’s one sub-sector within the healthcare umbrella that could provide some huge breakout opportunities. Here’s why I think so…  This Is One Very Impressive Chart Have a look at this long-term monthly chart of the NYSE Biotech Index. As you can see, biotech was a leading sector in the 2010s. In fact, during much of that

My regular daily TheoTrade chat participants will know we’ve entered the exact market environment I wanted to see. Here’s the thing – a lot of pundits out there make it seem like “nobody ever saw it coming” whenever a market pullback occurs. I’m here to tell you that there is nothing further from the truth. Call it laziness or a lack of ability – it does not matter. The talking heads are wrong. The truth is that tops take time to shape up and play out. You’re not just going to wake up one day with the market crashing down – at least not without any signs that it was coming beforehand. But now, we’re starting to see a setup that could signal more volatility in the coming months…  Here’s What I See Coming Around the Corner It’s really no different than weather forecasting. Just because conditions are there for a

Another week is upon us, so it’s time to take the measure of the markets’ behavior we might expect over the next sessions, based on recent sector performance rankings. I have a really cool “risk-on/risk-off” indicator that I’m looking forward to sharing with you shortly, but for now, I’m going to keep it simple and share how we continue to see the right sectors lead at the right time. After all, sector rotation is the lifeblood of bull markets, and there have been some positive developments in the performance rankings just in the last week. Check it out… Stocks Look Bullish for Now To anyone that’s been paying attention, seeing technology as the leader across the board here is not surprising at all. Whether it’s a stock like Nvidia, Apple, Microsoft, or Alphabet – it’s tech’s market, and we’re all just trading in it. But the good news is technology

Tennis legend Roger Federer gave the commencement address at Dartmouth earlier this week… and it was dynamite.  I want to share part of his speech with you because I think it has some important lessons that can make us all better investors. When it comes to being great at anything, be it tennis or trading, the importance of the mental component can’t be overstated. There’s a big difference between simply going through the motions and actively trading “in the zone.”  The last thing you want to be is a trader that responds to every headline and price swing in the market. So, what you need to ask yourself is this: Do you want to be right? Or do you want to make money? Because in markets, there’s a huge difference. Before I explain, let’s hear right from Federer… The Biggest Winners Keep Things in Perspective Federer’s speech to the Dartmouth Class of

Most markets are closed over the weekend, so I often use the time to get ahead on analysis. You see, the market is kind of like Mother Nature – it doesn’t wait for you, me, or anyone else, or whatever we have planned in our lives. It’s important to me that you know what’s going on in markets, not just at a surface level, but with respect to its internals as well. After all, this is where the most profitable opportunities germinate. If you’ve ever watched one of my sessions in the TheoTrade chat, you know that I like to take a top-down approach to markets. So I think it’s a great idea going forward  to review the performance of various sectors in the S&P 500 to share a deeper story…  Every Sector Behaves Differently The venerable S&P 500 is divided into 11 sectors and 24 industry groups: Certain sectors

A couple weeks ago, I shared a really intriguing trade recommendation for Nvidia, which has become the largest and most important stock in this market. My trade instructions were: “Buy NVDA on a close above $950.02 with a stop loss on a close below $887.47. Target $1200.”  I sent out the trade on May 16, and it triggered on May 21. After a solid rally for a couple weeks, it hit my upside target of $1200 on June 5, leaving fellow traders with a solid 26% gain against a barely 0.05% rise in the broader market. Here’s how and, just as importantly, why we put on the trade in the first place… Confession: I’m a Big Chart Guy I’ll level with you here… I can’t tell you how many hours over the last 12 years or so I’ve spent observing trends, patterns, and momentum. I wouldn’t go as far as calling

Aside from gold and the goldbugs, I can’t think of another asset class that fires up and drives those “animal spirits” the way cryptocurrency does. It’s been around 15 years since Bitcoin made its “Pizza Day” debut on markets, but it wasn’t until the mid-2010s that it started to gain some mainstream popularity. I must admit, I bought my first Bitcoins back in 2014 for around $350… but unfortunately, I didn’t hold onto them. Somehow I don’t think I’m the only one with a similar story. It’s easy, and quite frankly, even a bit lazy to think back and say, “If I’d only held onto those coins from before and never sold – I would be so rich!” But this isn’t just harmless bittersweet nostalgia. I’m here to tell you this way of thinking is actually a dangerous psychological trap. Besides, back in 2014, I wasn’t using these techniques to help

I’m sure by now you’ve seen a headline or two about Nvidia’s latest earnings, and their massive beat. The company reported a 600% profit explosion, largely due to AI-driven segments of their business. In response, the stock gapped up and is now trading at new all-time highs. The company is now worth more than Germany’s entire stock market, and more than Tesla and Amazon combined. If your first thought in response to these facts is, “this stock’s in a bubble”, I would agree with you, and here’s why: How to Play NVDA Stock Bubbles get a bad rap in the financial world, mainly because of two reasons. The first is that people that think they are smarter than the market refuse to participate, and the second is because those that actually do participate often end up losing their shirts when the bubble finally bursts. But guess what? Bubbles are actually