Hey, Ross here:
Let’s start the day by looking at a rare divergence happening in the market…
And how to take advantage of it.
Chart of the Day
Take a look at this chart.
The dark blue line shows S&P 500 earnings growth.
The light blue line shows equity positioning – basically, how aggressively investors are leaning into stocks.
Historically, these two tend to track each other pretty closely.
When earnings are strong, investors usually get more aggressive.
When earnings weaken, they usually start pulling back.
But right now, they’re telling two different stories.
Equity positioning is starting to reflect weaker earnings growth.
Meanwhile, forward earnings expectations are still holding up surprisingly well.
This is a clear divergence…
And it’s one that doesn’t usually last.
Eventually, one side has to give.
Either investors are being too cautious…
Or earnings estimates are still too high.
And that creates an opportunity – which I elaborate on below.
Insight of the Day
When positioning and expectations diverge, earnings surprises matter more
When the market and the analysts are looking at the same economy and reaching different conclusions…
That’s when earnings season starts to matter a lot more.
Because in an environment like this, the line becomes much more blurred.
Some stocks are priced for weakness.
Others are still priced for everything to be fine.
So when the numbers hit, even a relatively small surprise can have an outsized effect.
That’s the opportunity.
And there’s one group of traders that know exactly how to exploit it.
I’ll share more about this little-known group of elite traders tomorrow.
But for now, check out my latest video on the rare BUY signal the market just flashed.
Customer Story of the Day
“I recently attended my first Ross Givens live session, it was very educational.
He encouraged questions and shared valuable insights that I applied immediately.
He has a deep understanding of the stock market and explained his analytical methods in a way that was easy to grasp, even for beginners.
All of his trading strategies were presented with real-world current examples.
I walked away much more confident in my ability to analyze stocks and make informed investment decisions.
Highly recommended!”
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
