If you watch nothing but the talking heads on the news, it can seem like the world is ending.
Whether it’s the coronavirus pandemic, or the presidential election, or some other doomsday scenario, the media is only too happy to give you more things to worry about.
They’re quick to tell you that this state of things is our new reality – and that there’s no going back to how things were before.
Meanwhile, just take a look outside, and you’ll see it’s not as bad as they’re making it out to be.
Just this past weekend, I went to the mall with my wife. We live in South Florida. Instead of encountering an empty wasteland, we actually had trouble finding parking. When we went inside, it was more than half-full. The food court was packed.
This isn’t unexpected. People have been cooped up for months now due to the pandemic. And all that pent-up demand is ready to explode, like a shaken-up Coke bottle. People are desperate to return to normal, unlike what the media says.
And you can see the evidence with your own two eyes, whether you’re looking outside… or at the stock market.
Below, I’ll explain how we’re already seeing this play out in the market today… and the best way we can take advantage…
Don’t Follow the Headlines…
I learned early on that while headlines sometimes move stocks, following what the media says is more often than not a recipe for failure. You might make a quick buck here and there, but over time, it won’t lead to continued success.
So instead, I like to go to another source to see how the market’s really doing: the big money.
These players – the Wall Street asset managers and billion-dollar hedge funds – are the real movers of the market. I know because I worked for some of them, regularly making trades worth billions of dollars.
And soon enough, I realized the average investor could profit by following in their footsteps. So I built my own system off of decades of research and thousands of man-hours to zero in on these movements before anyone else knows about them.
It scans nearly 5,500 stocks every day, using algorithms to rank each one for strength. And it’s already paid off for my Palm Beach Trader subscribers. We’re now sitting on gains such as 460% on The Trade Desk (TTD)… 287% on SolarEdge Technologies (SEDG)… and 188% on Paycom Software (PAYC). And we just had three more positions hit all-time highs.
All because we let the big money lead us to those stocks.
But my system can do more than analyze individual stocks… it can also track the broad big-money buying and selling in the market. And looking at the data, the market is 81% overbought.
As I’ve mentioned before, there’s still plenty of buying going on with very little selling. So even though the market is overheated right now… it’s still primed to climb higher.
And if we take a closer look at the data, we can get an idea of what the big money is piling into…
The Next Sector on Big Money’s Shopping List
The big money is still flowing into the market, but it is moving from sector to sector. And if we use my system to examine which sectors are seeing more big-money buy signals, we can bet on those sectors to rise in the near term.
Right now, it looks like the big money is moving into discretionary stocks. These are companies that provide goods and services that people want but may not need. Think restaurants, furniture makers, and consumer electronics.
Naturally, this sector took a big hit when COVID-19 first hit the U.S. and people stopped buying unnecessary items. But lately, it’s getting a boost from the big money.
Take a look at this chart, which compares the number of big-money buy signals (represented by the green bars) in discretionary stocks with our proxy for the sector, the Consumer Discretionary Select Sector SPDR Fund (XLY).
As you can see, discretionary stocks suffered through May, when the coronavirus hit and big-money buying vanished. Then, big money piled into the sector in June.
While the big money started rotating into tech and health care stocks after that June spike, ever since the start of August, discretionary is leading the way again as it creeps upwards.
Out of a total of 731 buy signals in discretionary stocks this year, 67% of them have come since June, and 18% in August.
And based on what we see in the real world (not on television), it makes sense. We’re getting closer and closer to a vaccine that could signal the end of this pandemic. That’s inspiring people to start leaving their home, return to normal, and spend their money as they normally would.
If you’re looking to take advantage, consider buying XLY. It should provide solid exposure as buying in discretionary stocks ramps up. Just remember not to bet the farm on a single trade.
Patience and process!
Editor, Palm Beach Insider
P.S. Like I mentioned before, my system doesn’t just track the market by sector. It can identify individual stocks that are seeing big-money buying. So we can buy them before Wall Street’s moves send them soaring.
That’s why my Palm Beach Trader subscribers are sitting on an average win rate of 70% in our portfolio… with an average gain of 49% on our winners, across multiple sectors. We can find the dominant stocks in any area of the market.
So if you want to profit as this market continues to climb, there’s no better way than using my unbeatable system. I’ll tell you more about it right here.