Hey, Ross here:
The market had a good day yesterday after Trump announced a trade deal had been reached with Japan.
Today, let’s look at a chart that shows why one of the fundamental building blocks of the market is still doing well.
Chart of the Day
The left side of this chart shows the ratio of earnings upgrades to downgrades (the EPS Revision Ratio) according to the various indexes.
A ratio of 1, means the number of upgrades and downgrades are equal. Anything above 1 means there are more upgrades than downgrades, and the opposite is true for values below 1.
As you can see, right now, the S&P 500’s EPS Revision Ratio is 1.26.
In other words, there are 26% more upgrades than there are downgrades – far ahead of other global indexes.
And if you look on the right side of the chart, you can see that this ratio is far higher than the average during this bull market.
This means that analysts had likely overestimated the effect of Trump and tariffs on earnings…
And they’re now scrambling to revise those earnings back up.
This is obviously good news for the market, since earnings are a fundamental part of stock prices.
But these earnings revisions also create opportunities only a select few are aware of.
I explain more below.
P.S Have you missed this newsletter before because it got lost in your inbox? Text the word “trade” to 87858 and that will never happen again.
Insight of the Day
Earnings releases can create significant price overreactions – which lead to opportunities.
Earnings releases tend to create big dislocations in stock prices.
And I’m not just talking about the smaller more volatile stocks either.
Look at what happened to IBM after it released earnings yesterday.
And that’s IBM – a classic blue-chip stock.
But IBM actually crushed earnings expectations…
Meaning could be a huge overreaction on the market’s part…
An overreaction that could quickly correct – leading to big opportunities.
Now, please don’t rush out to buy IBM.
I don’t have a particular view on IBM stock – I was just using it as an example.
My point is that a lot of these post-earning selloffs are overreactions that can be major opportunities.
The question, of course, is – how do you separate the overreactions from the justified selloffs?
This is where the corporate insiders come in.
If they’re buying after a big earnings selloff, that’s something worth paying attention to.
That’s the potential that comes from following these insiders.
But that’s not the only insider buying signal I’m looking for.
And if you’re relying on just that insider buying signal, you’re likely to go nowhere.
But that’s why tomorrow, Friday morning, at 11 a.m. Eastern…
I’m going LIVE to reveal my full insider playbook – containing every single insider buying signal I look for.
Following these signals could have led to gains like 131%, 670%, and even 1,560%.
And they’re even more powerful when used in earnings season thanks to these overreactions.
So click here to reserve your seat for my live reveal tomorrow…
And I’ll see you Friday, July 25, at 11 a.m. ET sharp.
P.S. If you’re planning to attend on a mobile device, make sure you download the presentation app now so you don’t miss anything when it starts. See you there.
iOS: https://apps.apple.com/us/app/goto/id1465614785 Android: https://play.google.com/store/search?q=goto&c=apps
Customer Story of the Day
“These people are the best; they have their finger on customer support. They handled my request before I was a member.
And they make me a ton of money, a ton.”
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
