I’ll get straight to the point: I was right.

In January 2019, I said we probably wouldn’t see a rate hike this year—and it’d be bullish. (Palm Beach Trader subscribers can read the update here.) And we haven’t seen a rate hike so far…

In fact, Federal Reserve chair Jerome Powell signaled a rate cut is likely ahead.

During his congressional testimony last week, Powell cited looming economic risks as the reason. And his dovish stance boosted the markets. Last week, the S&P 500 closed above 3,000 for the first time ever.

Now, if you’re worried about “looming economic risks,” you shouldn’t be.

According to a CNBC report, since 1971, when the Fed cut rates without a recession, stocks went higher 100% of the time.

The current economic data doesn’t suggest we’re in a recession. So a rate cut would be very bullish.

For months, I said to ignore the bears. So congratulations if you did: The market is at record highs.

And if you’re one of my subscribers, give yourself a pat on the back. We recently sold four winners for an average double-digit gain. (More on that in a moment.)

Of course, the next question is whether this bull market will continue full steam ahead.

The answer is yes—with a caveat.

Today, I’ll tell you what that caveat is… where I think the market is headed for the rest of the year… and how to position yourself to profit.

Summer Doldrums

I spoke to a $2 billion money manager recently. And he said, “I hate August. They should just close the market for August and reopen in September.”

If you’ve been on Wall Street for long (like I have), then you know August is a notoriously volatile month for stocks. It’s a classic case of, “When the cat’s away, the mice will play.”

Like most people, professional investors like to take summer vacations. In fact, they probably vacation more than anyone else. Many of them retreat to the Hamptons this time of year.

So August is a great time to take positions off the table, kick back, and relax.

Now, I fully expect the markets to continue higher once the summer is over. But we’re also closing in on being overheated…

You see, my proprietary ratio for identifying overbought and oversold markets has been rocketing higher. (Remember, a level above 80% signals overbought conditions. And a level below 25% is oversold.)

We went from 36% on May 31 (nearing oversold territory) to 72% on July 9. So we’re getting closer to overbought levels—quickly.

But I’m not sounding the alarms. We’re trading at highs in a strong market.

These levels of buying are usually just unsustainable. So we’re setting up for a little pullback.

And these market conditions are presenting us with an opportune time to take some winners off the table.

In fact, we did this last Thursday with our Palm Beach Trader portfolio. We sold:

  • Ciena Corporation (CIEN) for a 40% gain in 10 months.

  • Broadridge Financial Solutions (BR) for a 33% gain in six months.

  • Paychex (PAYX) for a 29% gain in six months.

  • Medpace Holdings (MEDP) for a 7% gain in 10 months.

That’s an average gain of over 27% in about eight months. Over the same span, the S&P 500 returned only 10.5%.

And that’s on top of our triple-digit winners from earlier this year: The Trade Desk (TTD) and Paycom Software (PAYC).

Now, touting our past winners is fine and dandy. But where is the market headed next? And how should we position for the big move up?

For that, I turn to my proprietary stock-picking system…

More Green Ahead

I sift through nearly 5,500 stocks every day—pulling millions of data points and scoring them. I look for those with the highest-quality fundamentals.

Once I rank them from strongest to weakest, I look for unusual institutional (UI) signals. They’re the footprints I believe big-money players leave when trying to quietly get in and out of a stock.

(I send this same data to hedge funds and institutional investors who manage billions of dollars. And you’re getting the same insights.)

Right now, the data reinforces my bullish stance.

The table below shows the UI activity my system picked up in the market sectors. You can see plenty of buying going on…

Sector (by rank)

Number of Buy Signals

Number of Sell Signals

Information Technology






Consumer Discretionary









Consumer Staples









Health Care



Real Estate






What does this all mean?

Well, U.S. stocks are still hands down the best place in the world to invest in.

Now, while my overall outlook is bullish, we’re still heading into the summer doldrums.

So now is a good time to take some profits and reduce risk. That way you’ll free up some capital to redeploy on the next dip.

Personally, I’ll be looking for great stocks that the smart money is buying up. That’s where I feel the best odds of success are for future gains.

And if you want to learn how I look for these stocks, just click right here.

Stay bullish,

Jason Bodner
Editor, Palm Beach Trader

P.S. Years ago, my former firm helped create the fastest high-speed trading system in Wall Street history. Now, my new, private system takes it one step further. In just 20 minutes, it allows me to spot America’s fastest-growing stocks up to 30 days before they soar.

It’s the same system I used to help my subscribers capture triple-digit winners like The Trade Desk and Paycom in under nine months. And you can get a rare peek under the hood of my system—and see what it’s saying next—right here