Hey, Ross here:
July was a good month for the markets.
August though, is looking like a very different story, with the first trading day kicking off with a sharp dip.
I already cautioned the market was looking a bit overextended a couple weeks ago.
Let’s look at some charts and see what we can expect.
Chart of the Day
The above chart shows how the S&P 500 has typically performed in August across various time frames as well as post-election years.
As you can see, August is one of the weakest months of the year – especially in post-election years.
Now, I don’t put that much stock in seasonality.
But it is still a factor. And for this month, it is a factor that is negative for the broader markets.
The pullback we’ve seen over the past week has also been broad-based…
With the percent of stocks trading above their 20-day moving averages (a sign of short-term direction) falling from over 70% to 25%.
This is a clear pullback.
And considering that retail allocation to stocks are at the highest levels since January…
This may be a much more prolonged pullback than most expect.
Because remember, retail investors tend to be the “scared money”…
The weak hands that are most easily flushed out during a pullback.
This is a necessary process for the market to rally higher.
But the takeaway is, don’t be surprised if this flushing out period goes on for a while.
Speaking of “scared money”…
Here’s an interesting chart from Goldman Sachs about how the “smart money” is positioned instead.
It shows that hedge funds are still on the sidelines compared to the past few years.
I explain the implications of this below.
P.S I’m releasing my next edition of “2 Trades in under 2 Minutes” tomorrow. If you want to be the first to get these free trades, just text the word “trade” to 87858 and we’ll send them straight to your mobile tomorrow.
Insight of the Day
Hedge funds are waiting for the pullback.
The fact is this – many hedge funds have missed much of the rally since the April lows.
Sure, their allocation to US stocks has been increasing…
But it’s still historically low.
I have no doubt that many of them are still kicking themselves for missing out…
Which is why I believe they will be using this pullback to strategically position themselves for the next leg up.
If they miss the next rally, they could lose their jobs. Wall Street is not a forgiving place.
And that’s good news for us…
Because we can position ourselves right alongside them…
And use their incoming money flows for our gain.
The trick is knowing which stocks these institutions are targeting…
Because they do their best to hide their money trail from the public.
But after working in the heart of Wall Street, I know exactly what to look for.
And tomorrow, Tuesday August 5, at 11 a.m. Eastern…
I’m going LIVE to show you the exact strategy for positioning yourself alongside the “smart money”.
It all has to do with spotting the unique “pressure points” their buying patterns create.
Being able to do this could have led you to gains like 77% in 21 days, 51% in 15 days, and 87% in 24 hours.
After tomorrow’s presentation, you’ll know exactly how to detect these “pressure points” for yourself.
So click here to reserve your seat for tomorrow’s session…
And I’ll see you live Tuesday morning at 11 a.m. ET.
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
“I guess I have been a newbie in the stock market for years. Buying a stock and just letting it ride.
Yes, I made a little money, but after finding Ross Givens and his educational methods a few months ago, I have moved the stocks in my portfolio to ones with more potential than ever before.
I am so impressed I purchased a lifetime membership and learned a new selection method daily.”
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
