Just two days ago, everything was looking very bleak.
The coronavirus pandemic has everyone fearful. Stocks opened lower after several days of failed negotiations on a stimulus bill.
It reminded me of the last time I watched the Senate voting during the Great Financial Crisis. I was at my trading desk. And as it became clear that the bill wouldn’t pass, I watched the market sink.
I could feel the hearts of Americans sink, too. All we wanted was a resolution and a path forward.
But today, it’s just the opposite.
Democrats and Republicans have agreed upon a historic $2 trillion stimulus package that will likely pass in the Senate sometime today. The bill will go to the House next, where it should pass as well. And I expect President Trump will sign it into law.
If it is signed into law, it’ll be a huge boost for the U.S. economy. And leading up to the agreement, the market had its largest one-day rally since 1933.
You see, Wall Street always “plays chess”…
It prices in discounts and premiums because it’s thinking three to six months in advance. So the market is always 10 moves ahead.
And today, I’ll reveal what my system is saying its next move is – and whether or not now’s the time to buy…
My System Predicted These Moves
Regular readers know I spent nearly two decades on Wall Street myself, routinely trading more than $1 billion worth of stock for major clients.
And I used this experience to develop an “unbeatable” stock-picking system that’s highly accurate, comprehensive, and effective. It follows Wall Street’s big-money movements.
My system doesn’t just look at individual stocks, either. It can track big-money buying and selling in the broad market, too.
For example, it picked up the “face-ripper” we saw two weeks ago. This is when computers drive short-lived rallies… only for the algorithms to reverse and sell again. The investors who buy these rips eventually lose their shirts.
And on March 11, my system predicted oversold market conditions – and a possible trough – on March 20. As I told you on Monday, the markets became oversold on March 18. And we saw a small trough on March 23.
So throughout this period of unprecedented volatility, it’s predicted the market’s movements in advance.
But that’s why I’ve preached patience during this sell-off. Because these market swings aren’t over yet…
Where the Market’s Headed Next
Right now, my system’s big-money index is indicating we still have some time left before the markets fully stabilize…
Remember, when the index hits 80% (see the red line above) or more, it means buyers are in control and markets are overbought. And when it dips to 25% (the green line) or lower, sellers have taken the reins, leading the markets into oversold territory.
As I wrote on Monday, oversold conditions usually last about three weeks. And while we’re seeing a bounce on the positive stimulus package headlines, the volatility still needs to die down before we’re in the all clear.
But make no mistake, this is a key moment of recovery for stocks.
For the past month, the market has been pricing in the economic damage of the coronavirus pandemic on U.S. businesses. Now, it’s pricing in the coming effects of the stimulus package expected to pass in the Senate today.
The final thing it needs is clarity on treatment and a possible cure. When the number of new cases starts to plateau and the death rate begins slowing, we’ll be on the path to stability and rebuilding a new bull rally.
Remember, traders care about today… but investors care about tomorrow. So in the meantime, aggressive traders can buy the big dips.
But long-term, patient investors like us can keep an eye on our shopping list of high-quality companies with little debt and lots of cash that can weather the storm..
All you have to do is stay calm and focus on the bigger picture.
Patience and process!
Editor, Palm Beach Insider
P.S. As I mentioned above, I used my experience from nearly two decades at prestigious Wall Street firms to develop my “unbeatable” system.
It uses specific algorithms to look for this big-money buying activity. And it can help you capture the gains from Wall Street’s next “chess move” because it predicts the activity up to 10 days in advance.
Now, I put together a special presentation on how you can get in on the best stocks before the big money lifts them higher. You can learn all the details right here.